Finance Minister Nirmala Sitharaman on Saturday sought to quell complaints that the Budget had ignored the middle class and punished the rich, and the government was turning protectionist in trade policies.
She said the proposals for infrastructure and affordable housing would help the middle class, and the tax hike should be viewed as a sharing of responsibility rather than a measure to punish the rich.
“If you use the fuel tax hike and say I am hitting at the middle class, I would say I am investing in better metros, better public transport and so I expect there would be a behavioural shift towards more public transport usage,” she said.
The Finance Minister said the announcement of deductions for affordable housing was not aimed at the super-rich but at the middle class.
She also made the point that consumption was not ignored since investment in public infrastructure would put money in the people’s hands, as would the proposed minimum wage legislation the government was trying to pass.
Ms. Sitharaman defended her announcement of a 10% import duty on newsprint and a 5% duty on imported books saying it was aimed at encouraging domestic industry and the usage of domestic supply.
“I think there is enough number of publishing houses in India and also printers who have been voicing a concern saying we are being flooded by cheap books being printed outside,” she said. “Why should the capacities which have been invested in India lie idle just because books coming in from outside are cheap?”
“I think there is enough newsprint in India available which should first be utilised,” Ms Sitharaman said. “We wanted to make sure that happens.”
India’s newsprint demand was estimated to be about 2.7 million tonnes in 2018-19, according to Care Ratings. The industry estimates put the domestic capacity at only 15-20% of it. The hike in the import duty is expected to significantly raise production costs for the newspapers and magazines.
However, the Minister said this move, along with the numerous other import duty hikes she announced, should not be viewed as being protectionist.
“We have been asked if the government is becoming protectionist. Not at all,” she said. “We wanted to support Make in India, and therefore, where capacities exist within India for products that can be usefully bought by Indian procurers, we want to extend that help by deterring imports.”
Regarding the surcharge on those earning more than ₹2 crore a year, she emphasised the difference between rights and duties.
“There is a duty and there is a right,” she said. “Equally, all of us have to commit ourselves to building this country. It is not a punishment. It is more sharing of the responsibility. We cannot afford to have those who are in the poorest sections of our society to remain without basic amenities. We all have to share in... Therefore, I don’t see it as a punishment. It is part of ‘please participate in building this country’ exercise.”
