FM presents union budget; oppn slams it as ‘Pegasus spin budget’, ‘zero-sum budget’

NEW DELHI, 1 Feb: Finance Minister Nirmala Sitharaman on Tuesday unveiled a bigger Rs 39.45 lakh crore budget, with higher spending on highways to affordable housing with a view to fire up the key engines of the economy to sustain a world-beating recovery from the pandemic.

While she primed up spending on infrastructure to create jobs and boost economic activity, Sitharaman did not tinker with income tax slabs or tax rates.

Her budget for the fiscal year beginning April 2022 proposed a massive 35 percent jump in capital expenditure to Rs 7.5 lakh crores, coupled with rationalization of customs duty, an extension of time for setting up new manufacturing companies and plans for starting a digital currency and tax crypto assets.

Just like last year, the budget gave a big boost for infrastructure spending — from 5G spectrum auction, expanding national highways by 25,000 kms, inter-linking of rivers and manufacturing of 400 new-generation Vande Bharat trains.

“The overall sharp rebound and recovery of the economy is reflective of our country’s strong resilience,” she said in her budget speech in the Lok Sabha, vowing to lay the foundation for faster growth.

The budget prioritized economic expansion over fiscal consolidation. “This budget continues to provide the impetus for growth,” she asserted.

The fiscal deficit, which unexpectedly rose to 6.9 percent of the GDP for the current fiscal year ending 31 March, 2022, is projected to come down to 6.4 percent next year and 4.5 percent by 2025-26.

India’s economy is projected to grow by 9.2 percent in the current fiscal, before slowing to 8-8.5 percent in 2022-23 (April 2022 to March 2023). It had contracted by 6.6 percent in the fiscal year ended March 31, 2021.

The budget’s “approach is driven by seven engines,” Sitharaman said, listing roads, railways, airports, ports, mass transport, waterways and logistics infrastructure as the key areas.

“All seven engines will pull forward the economy in unison,” complemented by energy transmission, IT communication, water and sewerage sector and social infrastructure, she said.

The budget proposals laid the foundation for strengthening of different sectors like transportation and logistics sectors (gati shakti), banking and fintech (75 digital units to be set up), agriculture, EV sector (battery swapping policy), among others.

On the direct tax front, to further ease compliances for taxpayers, a new IT return system will be introduced and litigation will be reduced by restricting appeal rights of revenue authorities for consecutive years.

It marginally increased the time limit to commence production by 31 March, 2024 for units opting for the beneficial corporate tax rate of 15 percent.

To provide impetus to trust-based governance as a concept, an updated tax return system has been introduced, wherein a taxpayer can file a tax return upon payment of specified taxes within two years from the end of the relevant assessment year.

She unveiled a proposal to introduce digital currency by the RBI and said digital assets will be taxed at 30 percent with no deduction for any expenditure, except the cost of acquisition of such asset.

To give a boost to the startup community, she capped the surcharge on long-term capital gains at 15 percent now.

As a push to promote exports, the SEZ Act will be replaced with a new legislation and states shall become partners for development of infrastructure. In tandem, reforms are also proposed to be undertaken in the customs administration of SEZs, with facilitation related changes to be made.

From an indirect tax perspective, the concessional rate on capital goods imports under Project Import Scheme is proposed to be withdrawn to promote domestic industry, and imports will be taxed at 7.5 percent now.

The opposition slammed the union budget, calling it a “Pegasus spin budget” and a “zero-sum budget” that has nothing for the salaried class and the poor, even as Prime Minister Narendra Modi and BJP leaders hailed it as “people-friendly” with a focus on a building a self-reliant India.

Shortly after the finance minister presented the budget in the Lok Sabha, the opposition parties reacted sharply against the government’s economic blueprint while BJP leaders, including union ministers, welcomed the document as “visionary.”

Several Congress leaders, including former party president Rahul Gandhi, criticized Sitharaman for presenting a “lollypop budget” and alleged that it has exposed the government’s “anti-farmer and anti-poor” face. West Bengal Chief Minister Mamata Banerjee termed it a “Pegasus spin budget” that provided nothing to the common people who have been “crushed” by unemployment and inflation.

Senior Congress leader and former finance minister P Chidambaram dubbed the union budget “the most capitalist” and said the country is turning “very unequal” as nothing is offered to the poor and the farmers while sops have been provided to the big industrialists.

Addressing a press conference, he said that the Parliament may vote for this budget because the ruling party has a “brute majority” in the Lok Sabha, but the people will reject this capitalist budget.

Calling the budget “people-friendly and progressive”, Modi said it has brought new confidence to usher development in the midst of one the most terrible calamities in 100 years, a reference to the Covid-19 pandemic.

In his televised remarks on the budget, Modi said it would create many new opportunities for the common people, besides strengthening the economy.

Hailing the union budget as ‘visionary’, top BJP leaders said it outlines the Narendra Modi government’s focus on building a self-reliant India and is growth-oriented.

BJP chief JP Nadda said the budget “realizes the concept of social justice, equality, respect and equal opportunity.”

Echoing similar sentiments, union minister Amit Shah said this “visionary” budget would prove to be a budget to change the scale of India’s economy.

“The budget will be helpful in making India the world’s leading economy under the leadership of Prime Minister Modi by exploiting the opportunities that have arisen in the global economic world after the Covid-19 pandemic,” Shah said in a series of tweets in Hindi with the hashtag ‘#AatmanirbharBharatKaBudget’.

Union minister and senior BJP leader Rajnath Singh termed the budget “growth-oriented” and said it outlines the government’s focus on self-reliance and Prime Minister Narendra Modi’s vision for development and pro-people reforms.

Union minister Nitin Gadkari praised the budget for giving impetus to infrastructure development, and said, “It is a budget to promote modern infrastructure in the country, which will lay the foundation for a new India and improve the lives of 130 crore Indians.”

“M0di G0vernment’s Zer0 Sum Budget! Nothing for – Salaried class, Middle class, the poor and deprived, Youth, Farmers and MSMEs,” Gandhi said on Twitter.

In an Instagram post, he said “there is despair all around our country, our youth have no future and once again the Modi government’s budget completely ignores this painful reality.”

Congress general secretary Priyanka Gandhi Vadra also slammed the union budget, saying that it was nothing but an “attack on subsidies” and old “jumlas” (rhetoric).

The Congress on its official Twitter handle said that “the salaried and middle classes waited in anticipation for a budget to help them through their troubles, but the Lollipop Budget has proved once again that time spent waiting for ‘achhe din’ to come under BJP rule is nothing but time wasted.”

West Bengal CM and TMC chief Mamata Banerjee said the Centre was lost in “big words” signifying nothing.

“Budget has zero for common people, who are getting crushed by unemployment and inflation. Government is lost in big words signifying nothing – a Pegasus spin budget (sic),” she tweeted.

The oopposition is preparing to together take on the government in Parliament on the Pegasus snooping row after the New York Times claimed that India purchased the snooping spyware as part of a defence deal with Israel in 2017.

Delhi Chief Minister Arvind Kejriwal dubbed the union budget “disappointing” and said it has nothing for the common people.

CPI (M) general secretary Sitaram Yechury questioned the government on the purpose of the budget and asked why the wealthy have not been taxed further.

“Budget for whom? The richest 10% Indians own 75% of the country’s wealth. The bottom 60% own less than 5%. Why are those who amassed super-profits during the pandemic, while joblessness, poverty & hunger have grown, not being taxed more?” Yechury asked in a tweet.

Bahujan Samaj Party chief Mayawati said the budget has been brought to “woo the public with new promises” and alleged that the Centre has forgotten to implement its old announcements.

The budget proposed a massive 35 percent jump in capital expenditure to Rs 7.5 lakh crores, coupled with rationalization of customs duty, an extension of time for setting up new manufacturing companies and plans for starting a digital currency and tax crypto assets.

Welcoming the budget, Agriculture Minister Narendra Singh Tomar said unprecedented provisions have been made for the overall development of the farm sector.

Tomar in a statement said the budget allocation for the sector has been increased continuously and the finance minister has shown a vision in Budget 2022.

However, Swaraj India president Yogendra Yadav alleged that the government took its “revenge” on farmers for leading a successful movement against the now-repealed farm laws.

This budget has been marked by silence with regard to farmers as there was no mention of doubling the farmer’s income, no comments on schemes like the Pradhan Mantri Fasal Bima Yojana, he said.

Calling Union Budget 2022-23 “progressive” and “holistic,” Uttar Pradesh Chief Minister Yogi Adityanath said, “This is a budget which fulfills the vision of Atmanirbhar Bharat.” (PTI)