India’s Tax and Welfare Debate: MSMEs Raise Concerns Over Compliance, Freebies, and Fiscal Sustainability
Debate Grows Over Tax Burden, Welfare Spending, and the Strain on India’s MSME Sector Author : Vijesh Nair Date : 30/01/2026 India A renewed national debate is emerging over India’s taxation structure, welfare spending, and labour regulations, as small and medium business owners raise concerns about sustainability, fiscal balance, and the future of employment generation. While welfare schemes aimed at economically and socially disadvantaged groups remain a key pillar of public policy, economists and industry representatives are increasingly questioning whether the current balance between revenue generation and expenditure is placing disproportionate pressure on the productive sectors of the economy , particularly Micro, Small and Medium Enterprises (MSMEs). Rising Compliance Costs for Businesses India’s formal businesses, especially MSMEs, operate under multiple regulatory frameworks, including: Goods and Services Tax (GST) Income tax and corporate tax Provident Fund (PF) and E...