There is equity in the wealthy paying more, Finance Minister Arun Jaitley said while defending a Budget proposal to impose a 10% surcharge on the tax payable by those earning between ₹50 lakh and ₹1 crore.
“The data I have given shows how much of a non-compliant society we are. If you do not count the salaried people, then there are only 20 lakh voluntary filers who report an income of over Rs 5 lakh a year! This, I think, is incredible,” Mr. Jaitley said at an interactive session.
“I think there is equity in the wealthier paying more,” he added. “And so we decided to benefit all the honest tax payers, especially those in the bottom bracket.”
He spoke about the 10% surcharge in reply to Confederation of Indian Industry President Naushad Forbes’ objection that the surcharge was not in the spirit of rewarding the honest taxpayer.
The Finance Minister also said the electoral bonds he introduced in the Budget deserved to be tried, since the status quo was not working.
“If this system is tried in a few elections, then I think you will see large volumes of clean money entering the political system,” he said.
Mr. Jaitley also said that the Centre was considering the Economic Survey’s suggestion of creating a Public Sector Asset Rehabilitation Agency, to deal with the bad loans crisis facing Indian corporates and banks.
Regarding the fiscal path laid out in the Budget, Mr. Jaitley pointed out that rather looking at the government’s fiscal prudence, people should also look at the quality of the fiscal deficit.
“There are no tax refunds that have been held up, and we have not cut expenditure,” he said. “In fact, we have increased expenditure in all the sectors that need it. This was a year where we had to improve upon our spending. We were fully conscious of the fact that government spending would have to spur growth and private investment.”
