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Bottom 50% of Indians pay 64% of GST: Oxfam India’s claims about ‘disproportionate’ taxing of poor is ‘mathematically impossible’. Here is why

The charity organisation is unsure of its own claims about the bottom 50% of Indians, contributing to 64.3% of GST revenue as stated by the use of the term 'indicative inference.'

Oxfam India, a charitable organisation that supposedly fights against inequality in the country, has stirred the hornet’s nest with its outlandish claims about the Goods and Services Tax (GST) collection.

In its report published on Saturday (January 15), Oxfam India claimed that indirect taxes are being taken disproportionately from the poor and the middle class as compared to the rich.

“Approximately 64 percent of the total INR 14.83 lakh crore in Goods and Services Tax (GST), came from the bottom 50 percent of the population in 2021-22. As per estimates, 33 percent of GST comes from the middle 40 percent and only 3 percent from the top 10 percent,” Oxfam alleged.

Screengrab of the report by Oxfam India

“The bottom 50 percent of the population pays six times more on indirect taxes as a percentage of income compared to the top 10 percent. While the poor in India continue to be taxed more, the rich benefit from tax exemptions,” it further added.

The Director at Arrjavv and economics junkie, Diva Jain, debunked the claims made by Oxfam India in its report. “A cursory analysis of OXFAM’s (atrociously researched) report reveals clever wordplay and accounting shenanigans that will make a Goldman banker blush,” she tweeted.

According to her, the charity organisation is unsure of its own claims about the bottom 50% of Indians, contributing to 64.3% of GST revenue as stated by the use of the term ‘indicative inference.’

Diva Jain pointed out that the average monthly GST revenue in Financial Year 2022 was 1,23,585 crores. “If the above claim is true, it means that 64.3% of 1,23,585 cr= 79465 crores is equal to 6.7% of the total monthly income of the bottom 50% of Indians,” she explained.

Taking the bottom 50% of the population as 70 crores (given that the total population of India is estimated to be around 140 crores), Diva Jain calculated the monthly income of the cohort using the data provided by Oxfam India.

It turned out to be ₹16,943 per month or an annual income of ₹2,03,322 for the bottom 50% of the population (~ 70 crores). Interestingly, India’s GDP per capita (total value of goods and services produced in the country/ total population)is around ₹1,72,913.

“If the above claim of the bottom 50% of Indians contributing 64.3% of GST were true, it would imply that the bottom 50% of Indians have annual income higher than the per capita GDP/GNP of India. This is mathematically impossible,” Diva Jain pointed out.

Jain called out the bluff of Oxfam India and pointed out how it has been misleading the public. “Herein lies the trickery and wordplay that OXFAM has used to imply this sensationalist inference. OXFAM does not say that this is true for all GST revenue,” she noted.

“Only that this is true for GST revenue contributed by the goods that it studied. But instead of clearly specifying this and the goods that it has studied, it buries the details in a footnote at the end of the report,” Diva Jain added.

She further pointed out, “Nor does it reveal the source from where it got the contribution of individual goods to GST revenue, something central to its analysis.”

She lambasted the charity organisation for using dodgy statistics to push its vicious agenda. “While there is no harm in questioning the level of GST slabs, misrepresenting data and fanning sensationalism by using clever wordplay discredits the organisation and its capabilities,” she concluded.

Earlier in July 2019, then CEO of Oxfam India, Amitabh Behar, wrote a fawning article on the Congress party. In his article, Behar offered numerous sermons to the Congress party and eulogised its idea of India. His article displayed blatant political partisanship, something that has clearly crept into Oxfam’s functioning as well.

“The Congress has been a banyan tree of ideas under which a broad range of multiple and even diverse ideas have been nurtured and nourished as long as they have a common core ethos—which is in line with the fundamentals of the ideological frame of the Congress and the idea of India,” he had claimed.

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