Opinion: ‘Not burdened common man’

Soon after presenting her shortest Budget speech yet that lasted for some 92 minutes, Finance Minister Nirmala Sitharaman addressed the media, directly. There were no opening statements. Sitharaman’s fourth Budget in a row neither tinkered with tax slabs nor raised the standard deduction, which was widely expected in view of elevated inflation levels and the […]

Soon after presenting her shortest Budget speech yet that lasted for some 92 minutes, Finance Minister Nirmala Sitharaman addressed the media, directly. There were no opening statements. Sitharaman’s fourth Budget in a row neither tinkered with tax slabs nor raised the standard deduction, which was widely expected in view of elevated inflation levels and the impact of the pandemic on the middle class. But came in tax on sale of digital assets, cryptocurrencies and blended fuel push for infrastructure and a 30 per cent tax on transfer or sale of digital assets. “We’ve not increased the tax burden on the common man,” she said. An edited excerpt from her post-Budget press conference

Support to contact incentive sectors
One thing which has come out repeatedly from very many stakeholders and we recognized it is hospitality and contact intensive sectors. Post a second wave the hospitality sector is in difficulty and they needed support. The tested and sort of proven formula was the emergency credit liquidity guarantee scheme since that had worked out well for the MSMEs. So we thought that formulation is the best to be adopted. So to the existing Rs 4.5 lakh crore of sovereign guarantee, we added Rs 50,000 crore more sovereign guarantee and wanted the hospitality and contact intensive sectors to benefit out of it.

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On being conservative
Have been proved right on FY22 Fiscal Assessments that were made for FY22. Conservative may mean not being overtly and excessively optimistic. Sure to achieve the FY23 fiscal numbers, if anything will probably better them.

LIC IPO
The much-awaited initial public offering of LIC of India will in all probability go through this year. Have shown intent of government on privatisation – Air India got cleared, NINL has found its buyer. A little bit of work needs to be done. We have been very realistic in communicating disinvestment plan and achieving it.

Cryptos and 30% tax on profit from digital assets transactions
I don’t wait till regulations come in place for taxing people who are making profits. Can I?
I said the Reserve Bank (of India) will be issuing a digital currency. A currency becomes, or, a currency is a currency only when it is issued by the central bank, even if it is crypto. Anything outside of that, loosely all of it referred to as cryptocurrencies, they are not currencies. Let’s first understand we are not taxing currency that is yet to be issued. And that provision has been now made and the currency in the name of digital rupee will be issued. Exact name you will get a bit later, but the Reserve Bank is the one who is going to issue it. And what Reserve Bank issues is the digital currency. Everything that prevails outside of it in the name of digital are whatever assets being created by individuals. And in transacting those assets if there are profits being made, we are taxing that profit at 30 per cent. We are also tracking every trail of money in that by saying there will be a 1 per cent TDS (tax deducted at source) in every transaction in the crypto world. So, the distinctions are very clear. Currency is with the Reserve Bank. That will get issued sometime this year. The transactions happening in the crypto world are of different kinds of assets and for that, every transaction gets taxed.

On Green bonds
Sovereign green bonds announced in the budget are part of government’s overall borrowing programme, not additional. Proceeds from green bonds will be used on specific sectors and projects. In conversation with RBI, market participants, we will determine size of Green bonds for the domestic market

Replacing SEZ Act
Government working out modalities of replacement to SEZ Act. One broad objective of replacing SEZ Act is for states to be able to participate in SEZs in a better manner.

On belying expectations of middle class
If the expectation was to raise tax, I haven’t done that. I hadn’t done that (raise income tax rates) last year (and) this year too. I have not collected a single rupee additionally through tax burden. Last year, the Prime Minister directed that fiscal deficit should not be a concern during Covid-19 and there should not be an additional tax burden during the pandemic.

The government has taken to the spending route for the recovery of the economy from the massive disruption the pandemic has caused during the last two years. “We have not attempted to address the challenges caused by pandemic by increasing tax. There are times when you can give. There are times when you have to wait… But a lot of things have been done for the middle class. Taxes have not been raised during the pandemic to collect additional funds for the massive spending programme of the government.

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