Union finance minister Nirmala Sitharaman on Friday hiked tax on petrol and diesel, raised import duty on gold, levied an additional surcharge on super rich and brought a tax on high-value cash withdrawals as she sought to spur growth with a reduction in corporate tax and sops to the housing sector, startups and electric vehicles.
Presenting the maiden budget of Modi 2.0 government in Lok Sabha, Sitharaman, the first full-time woman Finance Minister, proposed measures to ease liquidity crisis facing shadow banking sector (NBFCs) and providing Rs 70,000 crore capital to public sector banks while seeking to raise additional resources through privatisation of some PSUs.
To decode the fine print of the union budget 2019, CNBC-TV18 spoke with Ajay Bhushan Pandey, revenue secretary; Girish Chandra Murmu, expenditure secretary and chief economic advisor Krishnamurthy V Subramanian.
Pandey said according to global trends those who earn more must contribute more and it is driven by principles of equity, "If you see the finance minister’s speech, she has thanked the taxpayers as they give the money to the government to carry out all the development programmes.
"I am not saying there should be excessive taxation but somewhere some realisation has to happen. The people who are earning above Rs 10 lakh are also in 30 percent bracket and people who are earning much more than that except that Rs 50 lakh and Rs 1 crore, slightly more in terms of surcharge. However, the tax bracket and the surcharge together there is not much difference between who are earning more than Rs 10 lakh and earning more than Rs 10-20 crore," he added.
Subramanian said, "After the financial crisis, there has been a lot of research in this area (equality) and not just in India but also in other countries. One of the key issues that have come about after the financial crisis is inequality in the society and any government in a democracy must be aware of the inequalities."
Giving some statistics, he said, "In our country, inequality is almost the same as in the United States. This is something which one has to take into account. It is really important to recognise that as we get into the 75th year of independence, we have to emphasise more on our duties."Murmu said, "W
e have correctly appreciated that infrastructure sector requires Rs 1 lakh crore. However, it does not say that it will be done by the government. We think that brownfield kind of projects or monetisation or private participation all these things have been factored in and accordingly some announcement had been made."