I am reposting this comment, which was inexplicably marked [dead] within seconds of being posted, even though it is a brand new account with no comment or submission history at all.
burnermore 2 minutes ago [dead] | parent | context | unvouch | favorite | on: India: A billion people have no real money to spen...
Indians who have huge spending potential are in huge numbers. They are just leaving India.
High skilled Indians are leaving in large numbers due to the tax regime that India is. I think it was 2022 where we recorded the largest number of Indians surrendering Indian citizenship. It's like India prepares and grooms them and they just leave. And I dont blame them.
Every single damn thing can be traced back to tax we are burdened with irrespective of left/right govt in power.
We pay tax like first world countries but get services like poorest of the poor countries.
Corporates are levied high tax. And international corporates even more. The argument is to support Indian companies.
And almost every Indian company provide horrible services which is why Indians always prefer foreign products/services. Now with International companies levied hefty tax, they cut corners, increase prices. So in effect we pay more and always get bad experiences.
Just take BS4 to BS6 transition in automobiles. Vehicles with a larger width or something was added with luxury tax and many of companies moved to cut corners to stay in business. My car has provision and setup for ventilated seats but its switched off to cut corners.
We dont get any good electronic products cos high import costs. And companies which has released stuff always have limited options or pay higher price for the same setup than everyone in the world. IIRC Indians may the most for an Apple product in the world. I donno if things have changed after they moved production here. I dont think so.
We pay 15 years worth of road tax in advance and we still have to pay for toll plazas. And we have horrible roads.
Oh and we dont any high quality products we produce. Whether it is tea (assam, darjeeling), coffee, nuts like cashew nuts, fruits. We get 3rd, 4th or quality and everything in 1st quality is exported.
Automobiles as well. There are automobile factories which produce high quality stuff for EU in India and the same factories produce subpar thing for India.
I can go on and on. This govt changed some things for middle class in this budget. So lets see.
> We pay tax like first world countries but get services like poorest of the poor countries.
I asked chatgpt to give a comparison, and I am not sure which country you're comparing against, but it seems people in India pay significantly less than in EU for example. (20% vs 40%, etc...)
EDIT: as cliché as it might sound, how about blaming it on the really high level of corruption spread across all layers? Corruption is a disease for a country, especially when you can bribe authorities for very small money.
You don't always need to blame corruption. Inefficiencies of all kinds (due to lack of education, lack of infrastructure, etc) also cause most 3rd world countries to have this kind of situation where services are paid for at least twice, once in the form of taxes, and then again to private companies that compensate the lack of quality of the public ones (education, health, security, transportation, etc).
The only "advantage" these countries have, is that labor is cheaper, so some kinds of labor-intensive activities could in theory be as good as, or even better, than first-world ones (other than climate-related activities such as farming, which naturally benefit from better sun/weather). But the overhead leads to overall worse outcomes.
Corruption does make it worse, but even in a corruption-less environment, the other inefficiencies might still lead to a scenario similar to "pay tax like first world countries but get services like poorest of the poor countries".
Of course, if only all of these privacy-destroying technologies and surveillance-state apparatus could be used to detect corruption, maybe one could have a technological corruption-less dystopia where every figure of power is tracked all the time, as is in a reality show? (In the worst case, we might see some privacy-restoring contraptions emerge from the dynamics of such systems.)
Inefficiencies are often the consequence of corruption or a mindset/culture that fosters favoritism vs merit, because not everyone is either smart enough to want to improve their companies or is willing to do what it takes to do so. Which could mean not hiring that friend that is not good, or that brother in law that shouldn't be doing this job, etc. Every action has a reaction, even a small one. You just have to live fine with it and accept it. Not saying we need to become machines, just saying we shouldn't complain if only friends of friends work in a hospital and maybe 1-2 doctors are good... And no, I am not talking about "I referred him, and he is good for that position". I am talking about people who have no clue and are hired nonetheless, just because of family or friends.
I come from a country where all these issues exist and one thing I learnt: it has nothing to do with taxes. On the contrary, the more you raise them, the more tax evasion will be. And the more you'll need to bribe or cheat the system.
This is generally inaccurate and not particularly insightful. Indians by and large aren't "paying tax like first world countries". The income tax rate is comparable to other countries and India actually has extremely low tax compliance. Only employees of medium and large companies report their incomes accurately.
As for low quality products, well it's just catering to the price point of the Indian consumer. The number of people in India willing to pay $10 for 50 grams of Assam is so low that it's not even worth putting out such a product in the market. Indians are also notoriously price-sensitive.
India has low tax compliance, so people who pay taxes (middle-class, salary jobs, no way to hide income or wealth) shoulder an unfair part of the overall tax burden. This is obviously being worked on by the government, but it remains true.
Once you add up the expenditures from double-spending (for example private health insurance, private retirement saving, private school, toll roads) the tax burden is well above what you would pay in an EU country.
The correct solution is to make India income-tax free. The corporate middle class that pays income tax is also the main driver of discretionary consumption. Pursuing personal tax compliance in a country such as India is futile.
> Every single damn thing can be traced back to tax we are burdened with irrespective of left/right govt in power.
The working majority is burdened with such taxes so that the rich and corporations can get tax breaks. All these taxes, even including the sales taxes are means to dump the tax burden on the majority and give tax cuts to the rich.
I don't know why, but you're somehow being targeted; This comment was also made dead.
If comments from newcomers are no longer allowed on HN, the hidden censors should speak up now to explicitly say so. Silent censorship is the harbinger of public debate's death.
> Oh and we dont any high quality products we produce. Whether it is tea (assam, darjeeling), coffee, nuts like cashew nuts, fruits. We get 3rd, 4th or quality and everything in 1st quality is exported.
This reminds me of a documentary I just watched, in a village in Peru, mangoes couldn't be sold and could only rot in the fields, "They can transport tens of thousands of tons of drugs, but can't even get a pound of ripe mangoes out."
One of the ways this is very evident is when you look at entry level software dev salaries at the giant IT sweatshops (Infosys, TCS, Wipro etc).
2010: ₹325k a year (equivalent to then $7000 per year)
2025: ₹350k a year (equivalent to now $4000 per year)
Even disregarding the global earning parity, that's only a rise of 10% over 15 years when inflation has risen by 100% in the same period. This is even more egregious when you consider that these companies earn primarily in dollars have enjoyed massive profits owing to depreciation of the Rupee.
These companies were once highly regarded for their earning potential. They moved a generation of employees from the lower income to the middle income bracket. Sadly, the same cannot be said of employees joining today, who haven't even seen their comps increased since the pandemic. They seem to be getting forever stuck in the lower income trap.
Hiring has already drastically reduced since the pandemic recession and now there's the threat of AI. At the same time, record numbers of CSE students are graduating out of universities each year, who are increasingly struggling to find employment. The country's service industry which once formed the backbone for the middle class is in a very critical stage. The future doesn't look very bright honestly.
Most graduates in this country needs to be trained from scratch for any serious programming work, due to how horrible the education system is. So it's not worth for the startups.
My friend doing B2B SaaS startups in India is very negative on the market since buyers are so penny pinching - sounds like the way is to build there but sell elsewhere.
I think the Indian business mindset still hasn't adapted to Western-style capitalism (derisk your personal wealth, throw a lot of money, go big or go bust) and entrepreneurs spend very cautiously which ultimately leads to failed outcomes. You can even see this in the way that big public corporations behave.
Startups tend to go for top talent because they're trying to grow very fast. It's ideal for small businesses though, but that kind of a market takes time to develop and needs a sizable upper middle class who can afford to bootstrap businesses independently.
> In fact, this has been a long-term structural trend that began even before the pandemic. India has been getting increasingly more unequal, with the top 10% of Indians now holding 57.7% of national income compared with 34% in 1990. The bottom half have seen their share of national income fall from 22.2% to 15%.
Yikes, and it’s not like there’s some magic in the free market that “helps” those folks… if anything they’re a market that companies might avoid….
I don’t know what they mean by income data, but let’s use the GDP as a proxy.
2025
GDP (Current USD) - $3.5Tn (actually 2023, but it’s probably still close)
Population - 1.45Bn
Bottom Half Population - 725mm
Bottom Half share - 15%
Bottom half share of GDP - $525Bn
Bottom half GDP per capita - $725
1990
GDP (current USD) - $320Bn
Population - 870mm
Bottom Half population - 435mm
Bottom Half Share - 22.2%
Bottom Half Share of GDP - $71Bn
Bottom Half GDP per capita - $163
So the bottom half per capita GDP in current USD has risen from $163 to $725, almost a 4.5x increase.
The increase in inequality is not good, but this isn’t the economic catastrophe for India’s poor that this article is presenting it as. In fact, a 4.5x increase in per capita income in 35 years is a significant achievement for a country of Indias size and diversity. It of course pales in comparison to what China has achieved, but what doesn’t pale in comparison to what China has achieved.
I question the utility of GDP as a proxy here. Unless it takes account of purchasing power, it seems to me that those nominal gains could easily have been inflated away. The average inflation over that period has been ~7%.
The problem with income inequality is that the pie is unlikely to keep growing forever, but your part of it can definitely keep shrinking. The underlying report goes into more detail of the mechanics.
https://marcellus.in/blogs/indias-middle-class-is-losing-gro... (to read it you have to affirm that you're not in the US, since the content could be construed as investment advice - this seems excessively cautious to me, but if you say you are in the US it will boot you to a generic landing page)
Actually its more a question of what others can learn from them, than the other way around because of these constraints.
The first time I was shown a case study of Amul (cooperative model of food production), it was a really eye opening moment, cause they had reached massive scale, profitable, invested in quality/innovation, really super creative (on the marketing side without any great budget) and most importantly Sustainable.
Like me if you have studied Dominoes, KFC and McDonalds this is not supposed to be possible. It shows how constraints in the local environment lead to innovation and totally different models that work.
Anyone getting thrown into the deep end of the Indian market, equipped with Western models are quickly confronted by assumptions that don't hold, and then they come up with stuff we don't see in the west.
Just look at their Dabbawalas (decentralized supply-chains/logistics), UPI (disintermediating Mastercard and Visa), IPL (no one thought cricket could compete when literally less than 10 countries playing the sport) etc
Western companies built their scalable models by optimizing for capital-heavy, consumption-driven economiess, but that doesn’t mean those models are the only viable ones. India (and other low-consumption economies) often find more sustainable ways to solve the same problems because there’s no safety net of endless VC funding, mass credit, or impulse spending to prop things up. Most Western companies operate in winner-takes-all mode (Amazon crushes small retailers, Uber kills taxis). But Indian models like UPI, Amul, Kirana networks show models of growth in a more cooperative manner.
Indians who have huge spending potential are in huge numbers. They are just leaving India.
High skilled Indians are leaving in large numbers due to the tax regime that India is. I think it was 2022 where we recorded the largest number of Indians surrendering Indian citizenship. It's like India prepares and grooms them and they just leave. And I dont blame them.
Every single damn thing can be traced back to tax we are burdened with irrespective of left/right govt in power.
We pay tax like first world countries but get services like poorest of the poor countries.
Corporates are levied high tax. And international corporates even more. The argument is to support Indian companies.
And almost every Indian company provide horrible services which is why Indians always prefer foreign products/services. Now with International companies levied hefty tax, they cut corners, increase prices. So in effect we pay more and always get bad experiences.
Just take BS4 to BS6 transition in automobiles. Vehicles with a larger width or something was added with luxury tax and many of companies moved to cut corners to stay in business. My car has provision and setup for ventilated seats but its removed to cut corners. BS6 version of my car have cheaper infotainment systems than my BS4 version.
We pay the highest tax for fuel. There are countries we provide fuel for which has 60ish/litre in our local currency. But we pay 100+/litre. Surpise, its tax.
We dont get any good electronic products cos high import costs. And companies which has released stuff always have limited options or pay higher price for the same setup than everyone in the world. IIRC Indians pay the most for an Apple product in the world. I donno if things have changed after they moved production here. I dont think so.
We pay 15 years worth of road tax in advance and we still have to pay for toll plazas. And we have horrible roads.
Oh and we dont get any high quality products we produce. Whether it is tea (assam, darjeeling), coffee, nuts like cashew nuts, fruits. We get 3rd, 4th or quality and everything in 1st quality is exported. If you want high quality cashew. You go to duty paid shops and get it. And you will see its imported but the brand is an Indian brand and its actually sourced from India.
Automobiles as well. There are automobile factories which produce high quality stuff for EU in India and the same factories produce subpar thing for India.
I can go on and on. This govt changed some things for middle class in this budget for tax. So lets see.
Most people don't realize US and many European countries are also rapidly moving in this direction already AI will likely accelerate it. Younger generations have started to wake up to the fact that capitilism won't work for them.
I get paid pretty well and also don't have to pay rent since I live in my parents' house (very common here). I just don't spend much despite that. Transport to and from work, the occasional Steam/PSN purchase and every few months a fancy dinner are like my only discretionary expenses. Everything is so low quality. I save my money and spend it while traveling instead.
Over the past 11 years since the current government took charge
people in India have been demanding a ton of changes :D. Before 2014 the Congress party ran the show for decades and
I firmly believe they trashed our culture values and economy with their clueless vision for the future.
But in the last 11 years Ive seen real progress with my own eyes better roads upgraded railways digitization
fewer terror attacks stronger borders and growing military exports.
These arent just promises they're visible results.
Sure people have gotten louder and more demanding lately but they conveniently forget how messy things were pre 2014.
Im from India and I can tell you things are getting better here (not 100% I admit that).
Yet Western media like the BBC love to zoom in on the negatives
(many times I saw this when we landed on the moon and when our satellite reached mars).
I personally believe India has transformed dramatically in these 11 years.
Yes some people are leaving the country and thats true enough. But at the same time this government is putting India
on the global map. The old regimes lack of foresight probably drove people away in the first place.
Also the new tax changes in India are actually helping regular salaried folks compared to 2014.
That's boosting peoples spending power which is a solid win. Criticism is fair enough but building a
nation isnt instant it takes at least 20 years of planning and patience.
Its like planting a tree you don't get fruit the next day.
Even with all the problems I hear from foreign news and my Indian friends it’s hard to deny that things are getting better - the question is how long will it take, not if; hopefully while India’s population remains young!
You only have to see the anti-Musk astroturfing on reddit to see how easily people are manipulated. The same has been happening against Modi, regardless of his merits.
burnermore 2 minutes ago [dead] | parent | context | unvouch | favorite | on: India: A billion people have no real money to spen...
Indians who have huge spending potential are in huge numbers. They are just leaving India. High skilled Indians are leaving in large numbers due to the tax regime that India is. I think it was 2022 where we recorded the largest number of Indians surrendering Indian citizenship. It's like India prepares and grooms them and they just leave. And I dont blame them.
Every single damn thing can be traced back to tax we are burdened with irrespective of left/right govt in power.
We pay tax like first world countries but get services like poorest of the poor countries.
Corporates are levied high tax. And international corporates even more. The argument is to support Indian companies.
And almost every Indian company provide horrible services which is why Indians always prefer foreign products/services. Now with International companies levied hefty tax, they cut corners, increase prices. So in effect we pay more and always get bad experiences.
Just take BS4 to BS6 transition in automobiles. Vehicles with a larger width or something was added with luxury tax and many of companies moved to cut corners to stay in business. My car has provision and setup for ventilated seats but its switched off to cut corners.
We dont get any good electronic products cos high import costs. And companies which has released stuff always have limited options or pay higher price for the same setup than everyone in the world. IIRC Indians may the most for an Apple product in the world. I donno if things have changed after they moved production here. I dont think so.
We pay 15 years worth of road tax in advance and we still have to pay for toll plazas. And we have horrible roads.
Oh and we dont any high quality products we produce. Whether it is tea (assam, darjeeling), coffee, nuts like cashew nuts, fruits. We get 3rd, 4th or quality and everything in 1st quality is exported.
Automobiles as well. There are automobile factories which produce high quality stuff for EU in India and the same factories produce subpar thing for India.
I can go on and on. This govt changed some things for middle class in this budget. So lets see.