Sitharaman says government. obliged to lighten the burden of the common man
Sitharaman says government. obliged to lighten the burden of the common man
NEW DELHI
Finance Minister Nirmala Sithararaman told Lok Sabha on Friday that the Russia-Ukraine conflict is to blame for soaring fuel prices, assuring that the government is determined to ease the burden on ordinary people.
Responding to the debate on Finance Bill 2022 being passed by the House of Commons, Ms Sitharaman tried to counter opposition criticism of high inflation and the lack of any tax breaks for the middle class in the budget by recalling a speech by India’s first Prime Minister Jawaharlal Nehru, in which he blamed the Korean War for the rise in food prices in 1951 funding pandemic spending and economic recovery.
The passage of the bill with 39 amendments, including clarifications on the taxation of virtual digital assets and the non-recognition of duties and surcharges as a business expense, paves the way for the government to implement the provisions of the Union Budget for 2022-23 April 1.
Citing an OECD report, Ms Sitharaman said at least 32 countries including Germany, France, the UK, Russia and Canada have increased various tax rates during the COVID-19 pandemic, while India has not.
Responding to MPs’ comments on lower corporate tax rates, Ms Sitharaman said the tax cuts announced in September 2019 had actually helped business, government and businesses.
“In 2018-19 our corporation tax collection was only about £6.6billion, then COVID happened… Despite this reduction and the COVID impact, we have already collected £7.3billion in corporation tax as of yesterday The corporation tax cut has borne us fruit even though the intervening year has been affected by COVID,” she explained, adding that improving corporate health could also lead to more employment.
Responding to criticism of the fuel price hikes since Tuesday, Ms. Sitharaman attributed it to the global situation resulting from the Russia-Ukraine war. “It has nothing to do with the election time,” she asserted. “If the oil distributors think they are buying at a higher rate on average 15 days, then of course we have to accept that [it]. And this war that is happening in Ukraine is affecting all countries, supply chains are broken, especially in crude oil and so on,” she added.
“In 1951 Pandit Jawaharlal Nehru could say that a Korean War would affect Indian inflation… Korea and the US could be used to justify price hikes when India was not globally connected, but if it really is so, let’s say today that the War in Ukraine is causing the price to go up, which is unacceptable,” she said, calling it a “double standard”.
“We as a government have believed strongly in bringing prices down and lightening the burden on the common man and we are doing so continuously and successfully. Just to compare what was then and what is now, on February 28, 1970, the Union Budget speech by Prime Minister Indira Gandhi, who was also Finance Minister at the time, had increased the marginal tax rate by 11 percentage points to 93.5% on all revenue over 2 Lakh,” she added.
“If we do 1% TDS (tax deduction at source) today, we will be taunted and slapped. Now the top tax plate for those earning over 10 lakh is just 30%. Taxes are an issue where the Congress Party has never considered lightening the burden on the common man, while we constantly work to ensure people are not burdened and we provide them with the maximum benefit,” Ms. Sitharaman said.
“People who run companies are treated with pride so they can create jobs. We don’t treat them as people we have to suck everything out of so we can have the vicarious pleasure of killing their entire business,” she claimed.
She stressed that the TDS regulations for virtual digital assets did not represent a new tax and said it was useful for tracking purposes.
“(TDS) is one of the reasons India’s tax base has widened. We had about 5 million taxpayers in 2014, which now reaches 9.1 million because we are able to follow the money trail of people who appear to be spending but don’t pay when they have to pay taxes,” the minister said and noted that this also reflects the results of the fight against black money in the economy.
Discussion of the bill took place by postponing the time normally allotted for private Members’ bills in the House and Ms Sitharaman explained that this was necessary as this was the last week of March and ministries are ideally able to should be to receive their funds by this date April 1st so that planned spending can begin soon.
