Tax, a compulsory fee paid by a citizen to the government without any direct quid pro quo. Even though the benefits are not directly reaped by a citizen, the collected tax amount is said to come back in the form of subsidies, services or development. The middle class feels the burden of a higher tax and definitely, DEFINITELY gets the benefits provided by the government from tax revenue collected, right? A tax wave off will benefit those people in multiple ways like higher savings and higher disposable income and the politicians know that, they try to gain seats by offering such appealing ideas to the general crowd, But is it really beneficial for us? Does it help in the long run?

Chief minister of one of the largest states of the country stated a few months back on the completion of a coastal road project that the road will be declared toll free, Other ministers of certain parties backed up the idea. It just made me question whether the economic perspective is even considered by those sitting members of the parliament or if they are more concerned with the clicking of the button next to their party symbol in an electoral bond machine. India’s fiscal deficit stands at 5.9%, it has gotten better in the past few years but we definitely cannot afford to cut down any sources of tax revenue. A growing deficit will only lead to pressure on other macroeconomic variables, In turn leading to more trouble for the people of India. 

One of the biggest downsides of toll free roads will be missing out on the growth of tax revenue from tolls in the past few years. There was a 46% growth in collection of tolls from FASTag between 2021-2022. Yes, we’re aware of the fact that the growth is also due to the adoption of technology such as FASTag by people but it cannot shadow the organic growth in tax revenue India is seeing from tolls over the years. Recently for FY24, NHAI, National Highway Authority of India declared that 75% of the annual target was achieved in just 5 months, three fourth of the estimated target was achieved in less than half a year, which instills confidence among the policymakers about our country’s potential. The growing tax revenue will help us bring down the fiscal deficit and cannot be compromised.

38% of the population of India will belong to the middle class by 2030 compared to the current 31% which would lead to an increase across the number of vehicles per thousand households.Even though a toll free road will help them retain their earnings, it is necessary for the country to counter the fiscal deficit. But the fact that the burden will be faced by the middle class for it while they share the same infrastructure as those reaping benefits from their tax amounts is not pleasing to the ears. There was a 46% growth in collection of tolls from FASTtag between 2021-2022. Yes, we’re aware of the fact that the growth is also due to the adoption of technology such as FASTtag by people but it cannot be denying the organ growth in tax revenue India is seeing from tolls

Will people going to vote even consider the other half of the story or only the headline will be attractive enough to convince the to cast their vote?

– Shubh Om Kanchan