Interview | Budget 2020

Budget 2020 | We wanted to make sure money is in people’s hands: Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman.

Union Finance Minister Nirmala Sitharaman.   | Photo Credit: PTI

New income tax scheme will give people the option to decide how to save, says Finance Minister Nirmala Sitharaman

At the post-Budget press conference, Finance Minister Nirmala Sitharaman exuded confidence in being able to reduce the fiscal deficit via increased revenue generation.

Watch | Highlights of Union Budget 2020-21

What are the exemptions being offered under the new income tax regime?

The intention is to reduce the rates as much as to simplify the structure. We wanted to be sure that money is in the hands of the people, by not paying a tax which they don't need to pay. Particularly for the middle class and the lower middle class, we have brought the income tax down. Ideally, a new scheme without any exemptions would have been the best, but still because there are some exemptions which are absolutely indispensable, we have kept it at a minimum.

How will you encourage savings under the new regime?

When there's more money in your hand, then you will be in a better position to decide where you want to save, instead of me directing you. So I am allowing you to have more money in your hand, and depend on your judgement where you want to make a saving.

 

What will the tax charter entail?

If I am right, there are only three countries in the world which have enshrined the rights of a tax payer in their laws — Canada, U.S. and Australia. It’s an article of faith for us to respect wealth creators. It’s an article of faith for us to make sure that the honest taxpayer is not suspect. And, therefore, we have made it a point to bring it into the Act itself as a charter, the details of which will come out.

 

Many say that your disinvestment target of ₹2.1 lakh crore is a very stiff target. How will the department achieve this, because we have seen a massive shortfall in this year.

(DIPAM secretary Tuhin Pandey): In November, government took decisions for some big ticket disinvestments — one is BPCL, another is CONCOR, another is Shipping Corporation of India... Some of them will conclude this year, but some of the large ones are going to spill over to the next year and the reciepts are going to come next year. The transactions are all lined up. As you know, the Air India Expressions of Interest are already out and very soon, the BPCL Expressions of Interest are also ready to be out as well. So we are quite hopeful that we will be meeting the disinvestment target next year.

 

Will it be possible to go from a fiscal deficit of 3.8% to directly achieve the 3.5% target?

Look at the way revenue generation is improving now. In the last three months itself, the GST collection has crossed ₹1 lakh crore, and there will be incentives because of the corporate tax rate cut. So I guess revenue generation improvement will give me that little comfort so that I can come down from 3.8% to 3.5% in the next fiscal, with the disinvestment also going to be effective.

 

There has been no allocation for recapitalisation for banks this year. Most of the mergers which were announced last year will take place now. So what is your recapitalisation plan?

I have not said I won't give any money for recapitalisation. You’re saying I have not given any numbers for recapitalisation, but I've also not said, ‘No, I will not give’. Which means, as and when there is a need, we'll certainly consider.

Watch | Highlights of Union Budget 2020-21
 

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Printable version | Apr 6, 2020 1:54:12 AM | https://www.thehindu.com/business/budget/we-wanted-to-make-sure-money-is-in-peoples-hands-nirmala-sitharaman/article30715762.ece

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