To revive an ailing economy, union finance minister Nirmala Sitharaman on Saturday said the Narendra Modi government will be doing more on stimulus and hinted that Centre may soon relax the personal income tax.
"I would like to believe there is a recovery in some sectors but others still need some help," Sitharaman said at the Hindustan Times Leadership Summit in New Delhi on Saturday. "My focus is on ensuring more is done for more stimulus," she said.
"So there are ways in which for giving stimulus for consumption. We are adopting a direct method and also the method through which we are spending on infrastructure, whose spillover can go to core industries labour and so on," she said.
Personal Income Tax
To provide relief to individuals and encourage consumption, Sitharaman said the government may soon relax the personal income tax burden. However, on the timeline for tax cuts, she said, "Wait for the Budget."
"A cut in personal income tax one among the many things we are looking at," the finance minister said.
Talking on recent controversies over revisions and delays of crucial numbers, FM said the government needs to "bring credibility to data."
"We need to assure people who need the data and lots of people need the data... Even the government needs its own data. But the fact is when sometimes something genuine has gone wrong in the ground, and therefore, survey results have been held back," she said.
Harassment-Free Taxation Regime
Sitharaman said the government is taking baby steps towards creating a simplified taxation structure that will also ensure that assessees are not harassed.
"We want to ensure that the entire tax structure is simplified. We want to remove the ifs and buts in the taxation structure in the long run," the minister said.
Sitharaman appealed to tax assessees to approach her office or the revenue secretary’s office in the finance ministry when facing harassment at the hands of tax officials and said the government is striving for an exemption-free tax regime.
"We have asked tax collection officers to not strain and put pressure on the assessees even if tax collection targets are not met," the minister said.
Sitharaman reiterated that 14 percent compensation cess to states will be honoured, "Unfortunately, in the last collections, the cess component has been not so adequate to compensate the states. We have reached a stage now where the collection was inadequate to compensate states."
Praising valuable contribution of Arun Jaitley towards GST, the minister said,
"GST is a good law and it is very required for a country as large as India. We have had more than 50-60 years of looking at India as one market. So it was only right and timely that we got the GST Act."
The minister said, "In enthusiasm to reduce taxes, the original framework has got distorted."
She said Reserve Bank of India (RBI) and the ministry of finance are watching the health of non-banking finance companies (NBFCs) as the government don’t want anyone falling off the cliff, "I am also making sure that funds reach NBFCs."
"Over the last 15-20 years, PSBs, scheduled and commercial banks were supposed to carry their core business of lending. Later on, these banks did long term infrastructure risk lending, and then NBFCs did it. As a result, when banks had non-performing assets (NPAs) and they did not want to venture any further into lending. The lending was moved to NBFCs and they went on a spree of lending," the minister said.
According to minister, the slowdown is seen in some sectors. "I think my attention will be only on making sure more is done towards the greater stimulus."