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Few points which i would like to add: 1. India does have very large middle class population and most of their income is unaccounted. 2. Majority of middle cla

Few points which i would like to add: 1. India does have very large middle class population and most of their income is unaccounted. 2. Majority of middle class Indians who belong to certain religion/caste hide their income so as to get many freebies and reservation benefits. 3. Very few rich individuals pay taxes and file correct income tax return. Government is very much responsible for this as filling a simple itr form consist of many different sections and people avoid getting into official paperwork. 4. Though poor people are given various subsidies on paper but because of lack of education they barely know all the scehmes running around them and politicians eat most of their money. 5. Longer judicial proceedings make it even more tough for the system to catch corrupt individuals and implement good policies.

vsundar 9y ago
> India does have very large middle class population and most of their income is unaccounted. At least until Nov 2016, wouldn't this income have been cash given that cash transactions accounted for 95+% of transactions[1]? (Percentage by total amount would have been useful too but I couldn't find that stat.) If these were 'unaccounted' then demonetization would have caught that. But only 1% of banned currency wasn't deposited (as of Aug 2017) [2]. The initial estimates given were for about 20% to not show up [3]. That didn't turn out to be the case. So while I'm sure there is unaccounted income, I'm not sure this is most of the income of a very large middle class. [1] https://www.forbes.com/sites/wadeshepard/2016/12/14/inside-indias-cashless-revolution/#38f374fe4d12 https://www.forbes.com/sites/wadeshepard/2016/12/14/inside-i... [2]https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetisation https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis... [3] https://www.forbes.com/sites/wadeshepard/2016/12/10/indias-central-bank-denied-its-big-payday-as-demonetization-flops/#6a440eb65494 https://www.forbes.com/sites/wadeshepard/2016/12/10/indias-c...
- ravirajx7 9y ago
  Very good point but i believe the cash in hand doesn't account for all the money you have. There are many facets for accountability. And I don't think that any middle class person having more cash in hand while exchanging his cash could potentially prove that his money is accountable because there exist some form of money which he has given to some other person or may be has invested in some business. My point is by totalling out just the amount of cash maybe 5-10k rupees the income cannot be accounted.
  - vsundar 9y ago
    > .. the cash in hand doesn't account for all the money you have. Yes, but your original point I was addressing wasn't about all the money you have but specifically income. My point is that income is coming from some transactions and 95% of transactions were cash based pre Nov 2017. And only 1% of cash outstanding was unaccounted for after demonetization. > My point is by totalling out just the amount of cash maybe 5-10k rupees the income cannot be accounted. Sorry don't understand what this means. But this is probably moot now.
AareyBaba 9y ago
> Majority of middle class Indians who belong to certain religion/caste Which religion/caste is getting freebies and reservation benefits ? I am not aware.
- meetapoorvgupta 9y ago
  Are you kidding me? 50% of the seats at IITs and every other government institution - including civil services - are reserved for people whose parents were also eligible for these reservations. https://en.wikipedia.org/wiki/Reservation_in_India https://en.wikipedia.org/wiki/Reservation_in_India
statguy 9y ago
> Very few rich individuals pay taxes and file correct income tax return. Government is very much responsible for this as filling a simple itr form consist of many different sections and people avoid getting into official paperwork. the complexity of the form is not the reason people avoid paying taxes - people don't pay taxes because they can get away with it.
- ravirajx7 9y ago
  > People don't pay taxes because they can get away with it. This certainly is one of the reason behind hiding income. But majority of the middle class don't even file itr 1 form (for income below 2.5 lakhs per annum ). For filling an itr 1 form, people don't need to pay any tax. Though people are not paying taxes but the money is being accounted and my point here is that of accountability. However, if the income was recorded the analysis of stats could have been done more efficiently.

vsundar 9y ago

> India does have very large middle class population and most of their income is unaccounted. At least until Nov 2016, wouldn't this income have been cash given that cash transactions accounted for 95+% of transactions[1]? (Percentage by total amount would have been useful too but I couldn't find that stat.) If these were 'unaccounted' then demonetization would have caught that. But only 1% of banned currency wasn't deposited (as of Aug 2017) [2]. The initial estimates given were for about 20% to not show up [3]. That didn't turn out to be the case. So while I'm sure there is unaccounted income, I'm not sure this is most of the income of a very large middle class. [1] https://www.forbes.com/sites/wadeshepard/2016/12/14/inside-indias-cashless-revolution/#38f374fe4d12 https://www.forbes.com/sites/wadeshepard/2016/12/14/inside-i... [2]https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetisation https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis... [3] https://www.forbes.com/sites/wadeshepard/2016/12/10/indias-central-bank-denied-its-big-payday-as-demonetization-flops/#6a440eb65494 https://www.forbes.com/sites/wadeshepard/2016/12/10/indias-c...

ravirajx7 9y ago
Very good point but i believe the cash in hand doesn't account for all the money you have. There are many facets for accountability. And I don't think that any middle class person having more cash in hand while exchanging his cash could potentially prove that his money is accountable because there exist some form of money which he has given to some other person or may be has invested in some business. My point is by totalling out just the amount of cash maybe 5-10k rupees the income cannot be accounted.
- vsundar 9y ago
  > .. the cash in hand doesn't account for all the money you have. Yes, but your original point I was addressing wasn't about all the money you have but specifically income. My point is that income is coming from some transactions and 95% of transactions were cash based pre Nov 2017. And only 1% of cash outstanding was unaccounted for after demonetization. > My point is by totalling out just the amount of cash maybe 5-10k rupees the income cannot be accounted. Sorry don't understand what this means. But this is probably moot now.

AareyBaba 9y ago

> Majority of middle class Indians who belong to certain religion/caste Which religion/caste is getting freebies and reservation benefits ? I am not aware.

meetapoorvgupta 9y ago
Are you kidding me? 50% of the seats at IITs and every other government institution - including civil services - are reserved for people whose parents were also eligible for these reservations. https://en.wikipedia.org/wiki/Reservation_in_India https://en.wikipedia.org/wiki/Reservation_in_India

statguy 9y ago

> Very few rich individuals pay taxes and file correct income tax return. Government is very much responsible for this as filling a simple itr form consist of many different sections and people avoid getting into official paperwork. the complexity of the form is not the reason people avoid paying taxes - people don't pay taxes because they can get away with it.

ravirajx7 9y ago
> People don't pay taxes because they can get away with it. This certainly is one of the reason behind hiding income. But majority of the middle class don't even file itr 1 form (for income below 2.5 lakhs per annum ). For filling an itr 1 form, people don't need to pay any tax. Though people are not paying taxes but the money is being accounted and my point here is that of accountability. However, if the income was recorded the analysis of stats could have been done more efficiently.