Want to make exemption-free tax regime attractive for people: FM Sitharaman

Sitharaman said large macroeconomic considerations had been kept in mind, and fiscal consolidation had not been ignored

Finance Minister Nirmala Sitharaman, along with her core team, addressed the media after her 2023 Union Budget speech. She said large macroeconomic considerations had been kept in mind, and fiscal consolidation had not been ignored. Edited excerpts:

Union Finance Minister (FM) Nirmala Sitharaman, along with her core team, on Wednesday addressed the media after her 2023 Union Budget speech. The following are some of the topics they spoke on.

On the overall Budget theme

FM: I think the Budget is beautifully balanced. Growth considerations have been taken care of through capital investment. We have looked at public-sector investment and also attended to micro, small, and medium enterprises. We have given them tax relief and new access to funds. The middle class needed the kind of tax breaks the Budget has provided. Large macroeconomic considerations have been kept in mind, and fiscal consolidation has not been ignored.

On new personal income tax regime

FM: We want to make the new tax regime, which is without exemption, attractive enough for people to think this will be the best option. But if there are people who think that being in the exemption regime, which is the old regime, benefits them, they are welcome to continue. But the ultimate aim is to make the new regime attractive.

Revenue Secretary Sanjay Malhotra: Regarding the earlier announced new exemption-less corporate tax regime, more than 60 per cent of the companies are now under that. For the new personal income tax regime, we don’t have the number but we hope that most taxpayers will avail themselves of that.

On inflation

FM: You have seen both consumer price inflation and wholesale price inflation come down, because of the steps taken by the government and the Reserve Bank of India. It is not that we are looking the other way when inflation goes up and down. We have attended to it with all earnestness.

On capex

Finance Secretary TV Somanathan: The Revised Estimates (RE) for FY23 are lower, they are 97 per cent of Budget Estimates (BE). That is mainly on account of capex support to states. In fact, the Centre’s capex will exceed the Budget Estimates. Some states have not been able to meet the conditions required for disbursing part of the Rs 1 trillion to the states. About 76 per cent of that amount is likely to be spent.

On review of financial sector regulators

Economic Affairs Secretary Ajay Seth: Some of the regulations are brought in to serve a regular purpose. Thereafter, the economic condition changes, and regulators do carry out these exercises on their own. But there is a time now to take up a comprehensive review of what the regulations are and what the economy needs.

On amendments to banking laws

Seth: These measures are for improving board governance in banks and for investor protection. These have nothing to do with privatisation of state-owned banks.

On borrowings targets

Somanathan: The increase in borrowing over the last year is 8 per cent. The economy has grown by 15 per cent in nominal terms over the same period. This is a level of borrowing that will not lead to any crowding out and will not increase borrowing costs for the private sector.

The market borrowing numbers are completely firm. As regards small savings numbers, traditionally there is seasonality. In aggregate, other sources except market borrowing will be close to what we have estimated. We are confident of being within our market borrowing numbers for FY23.

Green bonds

Seth: For the current year, for $2 billion, one tranche has already been carried out, and the other tranche is happening. After that, if the sovereign green fund requires more money, we will raise through green bonds. But that is only after the money raised through the green bond issuances for the current year is exhausted. That will be part of overall borrowing. We have no fixed target for green bonds next year.

On TDS on online gaming

Malhotra: Two changes have been made. One is that tax will be on net winnings because in online games you can generally play over days and you won’t play just one game. The other change is that TDS was on winnings of Rs 10,000 and more. That threshold has been removed because some online gaming companies were keeping winnings lower than that.