Union Finance Minister Nirmala Sitharaman, along with his team of top officials, highlighted the specifics of the budget of FY 2025-26 at a press conference with his team. During this, he spoke on many issues like tax simplification path, emphasis on capital expenditure.
When will the new tax bill be passed?
Finance Minister: Any bill first goes to the Standing Committee, after which the committee consults all stakeholders and then the bill comes back to us. After this, if necessary, some more changes can be made. I hope it will pass in the current session itself.
How much benefit from tax exemption?
Finance and Revenue Secretary Tuhin Kant Pandey: The Finance Minister decided that some people should give a little more benefit, so an additional discount of Rs 5 lakh was given. This will benefit about one crore people with income up to Rs 12 lakh. We hope that all this money will return to the economy as savings, consumption and investment.
Finance Minister: We heard the voice of the public and also assessed ourselves. If you compare with the tax rates of the Congress rule of 2014, then those who earn up to 8 lakh rupees, will save more than one lakh rupees in their pockets and about 2 lakh rupees to those who earn up to 12 lakh rupees. There will be an additional income of lakh rupees.
Why is there not a special increase in capital expenditure?
Finance Minister: There has been no cut in public spending on capital expenditure. We have maintained emphasis on the multiplier effect of the government’s capital expenditure. For this reason, they are dead. Not only this, with this, our fiscal conscience is running in the year 2020-21 as per our announcement.
It was the year of election and due to this, the investment of both the central and state governments was only gaining momentum since the second and third quarters.
Ajay Seth, Secretary of Economic Affairs: Effective capital expenditure, which includes the amount given by the government to the states for their capital expenditure, is 4.3 per cent of GDP. So it is not a capacity issue. Many new areas are coming out. For example, allocation in urban areas is increasing.
Manoj Govil, Expenditure Secretary: A capital expenditure is what we give directly. The second is as a grant to the state governments. If you also include assistance grant or construction of capital assets in it, then the total amount for next year is Rs 15.48 lakh crore in budget allocation, which is 15 percent more than the revised estimate of the current year.
What would you say about disinvestment and asset mudification scheme?
Pandey: We have set a target of creation, not disinvestment. Both dividends and disinvestment should be seen together. It has five elements- CPSE performance, communication, CPSE capital expenditure, sustainable dividend policy and well-planned disinvestment strategy. Listing is also part of it. You see 80,000 to 90,000 crore rupees have been raised in such a way that is beneficial for minority shareholders.
Finance Minister: Based on positive response, we are identifying some more assets suitable for mudification. We are engaged in intensive consultation with states, many of these states have identified the assets that they want to use for their own benefits.
Ajay Seth: Till now we want to double our efforts in the next phase on the same basis. Transmission will also bring new asset classes such as assets. These assets will be not only of the Government of India but also of the state governments. The mudification scheme will be disclosed soon. The idea behind the mudification is to put the amount received from government -owned or PSU assets (such as NHAI) in new projects to give new strength to the economy. The amount received from this will not go directly to the account of the central government, but will remain with the organizations which will be able to use this fund in further infrastructure development.
Why change bilateral investment agreement?
Finance Minister: We want to change it only to make more investment favorable. Even though it suits the UAE, it will be different from the 2016 version. I am not talking about a certain detective. We want to make it stronger and investment favorable.
Steps taken on tariffs?
Finance Minister: So far, there were many types of tariffs on many types of commodities in the basket, which we have reduced. The common belief that has been made is that there is a lot of charge in India, it is not correct. You will see that we have cut it rapidly and have simplified the fees.