Why Budget 2022 Didn’t Have Major Income Tax Changes: FM Nirmala Sitharaman Explains to News18
Finance minister Nirmala Sitharaman on Wednesday termed the Union Budget 2022 a “responsible” one. In an exclusive interview with Rahul Joshi, Group Editor-in-Chief, Network18, she said, “Being conservative is not wrong. Being conservative is also being responsible.”
As the Indian economy is still recovering from the Covid-19 pandemic, Sitharaman said that it is important to have a stable tax regime in the country. “Tax stability and predictability are at least making sure people’s plans remain unaffected,” she said.
Finance minister Nirmala Sitharaman presented Budget 2022 on February 1. There was no change in the income tax slabs or major announcements for the common salaried taxpayers.
“In India, where taxpayers’ number and profile is seen, then you realise it is possible to provide stability and credibility in the tax regime. You don’t want to bring in elements of uncertainty,” said the minister.
“By not increasing anybody’s burden, we can give them the ability to plan better. So, we considered stability and predictability more important,” she said.
On sharp jump in capital expenditure in Budget
In her first interview with a private news channel after presenting Budget 2022, Sitharaman backed the sharp jump in capital expenditure announced. In the Budget, the government has announced an increase of 35.4 per cent in capital expenditure to Rs 7.50 lakh crore for FY23 from Rs 5.54 lakh crore for FY22. Sitharaman said that the government wanted to maintain the momentum of reviving the economy after the pandemic.
“Only by increasing public expenditure in infrastructure will the economy see a sustainable revival after the aftermath of Covid-19,” the finance minister added.
“Only by public investment in infra will there be a virtuous cycle and crowding in. We thought if the economy does well, the multiplier effect of spending on infra is higher as opposed to giving money. We wanted to have a maximum multiplier effect that would have an impact on the economy. The economy at this juncture requires strong support,” Sitharaman said.
On the government’s privatisation plans, she said, “Not necessary for me to list out but my commitment (towards disinvestment) remains. Air India was a complex subject. To be compliant with all diligence required took a lot of work. My commitment remains and continues. LIC IPO plans are going fine. It should happen this year itself. Money from the LIC IPO will come this year itself.”
On inflation
On the issue of rising inflation, Sitharaman said, “I think globally all economies are worried about inflation. It does affect planning.” The inflation rates in India are high at the moment due to global factors like prices of metal, fossil fuel prices and other imports, she added.
She also mentioned that the government did not consider the upcoming state elections while preparing the Budget. “The elections come and go, the economy required a strong support at this juncture when it was coming out of pandemic,” she said.
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