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Informist, Monday, Jan. 6, 2025

 

NEW DELHI – Trade unions Monday asked the finance ministry to increase taxes on the 'super-rich' taxpayers in the Union Budget for 2025-26 (Apr-Mar), and also introduce wealth and inheritance taxes in order to guarantee social security to all the informal workers in the country. On the other hand, unions sought relief from the tax burden on the working class on both direct and indirect tax fronts.

 

In the pre-Budget consultation meeting with the finance ministry, trade unions said that an additional 2% tax should be imposed on the 'super-rich', while the exemption limit for income tax should be raised to INR 1 million. Under the new tax regime, there is no tax on income up to INR 300,000. Personal income between INR 300,000 and INR 700,000 is taxed at 5%, while income between INR 700,000 and INR 1 million is taxed 10%. Income between INR 1.0–INR 1.2 million is taxed at 15%, while the tax rate for INR 1.2-INR 1.5 million is 20%. Income above INR 1.5 million is taxed at 30%.

 

"We have asked the government to reduce the burden of indirect tax on the people of India, the burden of GST (goods and services tax)," Sucheta De, national vice president, All India Central Council of Trade Union, said after the meeting. "In terms of resource mobilisation, we have asked them to stop the reduction in corporate tax and also introduce gift tax, wealth tax, and inheritance tax," De told Informist. 

 

This was the eighth pre-Budget consultation meeting held by Finance Minister Nirmala Sitharaman in the run-up to the Budget, to be presented on Feb. 1. Prior to this, Sitharaman held similar meetings with sector experts, economists, and industry bodies.

 

PAY COMMISSION

Labour unions asked the finance minister to constitute the 8th Pay Commission immediately. Centre of Indian Trade Unions National Secretary Swadesh Dev Roye said that the constitution of the 8th Pay Commission is already delayed as it has to be effective Jan. 1, 2026. This, Dev Roye said, "shall have cascading impact" and will lead to serious economic hardship for government employees. 

 

In December, the finance ministry said that there is no proposal under consideration to constitute the 8th Central Pay Commission. Since Jan. 1, 2016, central government employees and pensioners have been getting their salaries and pensions based on the recommendations of the 7th Pay Commission that was set up in 2014.

 

PENSIONS, MINIMUM WAGES

Unions also sought higher pensions under the Employee Pension Scheme, 1995. The pension for 7.8 million pensioners under the Employees' Provident Fund Organisation should be raised to INR 5,000 from INR 1,000 immediately, several trade union representatives said at the meeting. 

 

They also sought the restoration of the old pension scheme instead of the New Pension System and the Unified Pension Scheme. Unions said that pensioners must be exempt from paying income tax on pensions. 

 

Trade unions said there should be a national minimum wage even as the unions were divided on the amount. Some were in favour of a minimum wage of INR 35,000, but others said the minium wage should not be less than INR 26,000.

 

Some unions said that the Centre should focus on filling the government vacancies, rather than "handing out taxpayers' money to companies" under the employment-linked incentive scheme, which was announced in the FY25 Budget in July.

 

"Sick" public sector undertakings need to be revived, for which the government should form a committee that includes members of trade unions along with the management of the companies and government representatives, Pawan Kumar, north zonal organising secretary, Bharatiya Mazdoor Sangh said.  End

 

Reported by Shubham Rana

Edited by Tanima Banerjee

 

 

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