NEW DELHI: Finance minister Nirmala Sitharaman on Wednesday told lawmakers that economic growth, the nation’s security and the welfare of farmers were on top of the government’s agenda.
Sitharaman defended the government’s approach in arresting the economic slowdown, tackling rural distress, and cleaning up the pile of toxic assets that cripple lenders, in her reply to a discussion in the Lok Sabha on the Union budget that was presented on 5 July.
“The government has set up a five-member cabinet committee on investment and growth chaired by the prime minister. We are taking very strong steps for promoting growth and incentivising investment," said Sitharaman.
The problem of bad debts in the banking sector was being tackled in a comprehensive manner, she said.
The first budget after the Bharatiya Janata Party government led by Prime Minister Narendra Modi was retuned to power in May for a second consecutive term, reiterated some of the steps it has already taken for the benefit of farmers, small traders, and the self-employed.
The budget also proposed to raise taxes on people with income of more than ₹2 crore a year and offered tax breaks for new investments in sunrise industries. It proposed to extend a low 25% corporate tax rate that has been available to companies with up to ₹250 crore sales to those with sales up to ₹400 crore.
Sitharaman said the approach in tackling the balance sheet problem of banks because of bad debt was four-fold and included early recognition of the bad debt, recapitalization of banks, resolution of bad debt and reforms. Promoters of defaulting companies have been barred from winning back their companies before paying back dues, as part of bankruptcy reforms, she said.
The Lok Sabha is expected to discuss the tax proposals in the budget, which are part of the Finance Bill, later in the session.
The government was committed to the path of fiscal consolidation without compromising on public expenditure, the minister said. Infrastructure investment is being stepped up and foreign direct investment norms are being relaxed to make India a $5 trillion economy, she said.
The Congress, DMK, TMC, NC, and NCP walked out during the minister’s reply, demanding a roll back of cess on petrol and diesel announced in the budget and shouting slogans saying it was an anti-people budget, news agency PTI reported.
Sitharaman did not comment on the increase in taxes on petrol and diesel proposed in the budget.
The Modi administration is exploring ways of dealing with the rural distress caused by sustained low prices of agricultural produce that has forced several states to announce farm loan waivers since last year. Creating quality jobs and adding momentum to economic growth are the other challenges it is facing.
India’s economy expanded at 5.8% in the March quarter of FY19, its lowest pace in nearly five years. The economic survey FY19 made a strong case for boosting investments into the economy.