New Delhi: Attacking the Opposition parties for questioning the growth of the Indian economy, Union finance minister Nirmala Sitharaman on Thursday said that the multiplier effect of capital spending has helped the country become the world’s fastest-growing economy and the 2024-25 Budget is aimed at promoting investments and creating jobs for the youth in the country.
“The Union Budget balances different overriding imperatives, including growth, employment, capital expenditure and fiscal consolidation. Besides, India's middle class is getting smarter when it comes to their savings and is diversifying their portfolios for better returns. We have tried to balance all these without compromising on any one sector,” she said in the Rajya Sabha while responding to the Finance Bill discussion.
After the debate and the Union finance minister's reply, Parliament also completed the Budget exercises, with the Rajya Sabha returning the Appropriation Bill and Finance Bill to the Lok Sabha. After a brief discussion and reply by the minister, the Upper House returned all the money bills. Earlier, these bills were also approved by the Lok Sabha. Ms Sitharaman presented the Budget for fiscal 2024-25 in the Lok Sabha on July 23.
During Ms Sitharaman's reply on the Finance Bill in the Rajya Sabha, Ms Sitharaman said that individuals may not be sitting in post offices or going for fixed deposits, but they are finding portfolios with better returns. “They are also investing in property. Besides, household savers are seeking better returns than what the traditional avenues have been offering. Today, small savings are not the only thing in the portfolio anymore; people are finding different portfolios for better returns,” she added.
“When we were talking about rationalising capital gains tax, many questioned us on bringing a small increase in the future and options segment and people told me to my surprise such investments were being done by the middle class. The diversification is taking the common savers to diversify into real estate too. People are looking at turning their savings into investments in properties as well as in portfolios with better returns,” Ms Sitharaman said.
On several concerns raised by some members regarding haircuts in insolvency cases, Ms Sitharaman said defaulting promoters are not allowed to re-bid for their own company so that “we don't have them coming through the back door and getting it for a lesser price.”
The Union finance minister also refuted assertions by the Opposition members that Budget allocation for several key sectors has been reduced. To further her point, Ms Sitharaman said that more funds have been given to agriculture and allied sectors. “`1.44-lakh crores was the allocation last year. This time it has gone up to `1.52-lakh crores, that is `8,000 crores more,” she said.
The Union finance minister also underscored that the government has made efforts to reduce the tax burden on the middle class substantially, especially at a time when many developed economies have increased tax rates.
“The step to amend the Finance Bill and bring back an option for indexation benefit is a ‘progressive approach’ in dealing with the feedback. By giving an option, we have ensured no one faces an additional tax burden due to this change,” she said.
Replying to the discussions in the Upper House, the Union finance minister sarcastically questioned the Opposition's demand for withdrawal of the 18 per cent GST on health insurance premiums. Calling the demand “thoroughly amazing”, she asked the Opposition to bring the proposal to the GST council through their states’ finance ministers.
Ms Sitharaman further said that Union transport minister Nitin Gadkari's letter seeking the removal of 18 per cent GST on health and life insurance premiums was released without permission. “Some minister wrote a letter and someone from the delegation, without the minister's permission, made it public. The Opposition saw this as an opportunity,” she added.
The Opposition has vehemently raised the issue of 18 per cent GST on medical insurance premiums, blaming the Union Budget for the tax. However, the finance minister revealed that the matter was discussed three times in the GST council meeting. The council discussed the matter at its 31st meeting, 37th meeting and 47th meeting.
Prior to the row, Ms Sitharaman said all states used to levy taxes on insurance premiums. “So when GST was rolled out, the tax automatically got subsumed into GST,” she said.
Responding to TMC Rajya Sabha member Derek O'Brien's question that in the GST council, if the majority vote is with the NDA, then why was the levy not reduced, Ms Sitharaman said, "The endeavour is to take all decisions in the Council with consensus.”
