Jaitley rejects criticism over tax sops, farmer income scheme

Union Minister Arun Jaitley on Friday rejected criticism of the interim Budget as election-oriented, saying all the announcements like income scheme for farmers and direct tax changes as "urgently needed" at the moment which would also boost the economy through higher consumer spending.

He also maintained that the measures announced in the Budget were in the direction of the steps taken by the government in the last five years and there was no departure from that.

"I completely reject this artificial distinction between changes in direct and indirect taxes. The changes made will boost economy. Is it not necessary at this time? I have already called these critics 'nawabs' of negativity. The measures announced will give a boost to consumption and the money will come back as indirect taxes."

He was asked about the propriety of tinkering with direct taxes against convention of changing only indirect taxes in the interim Budget to tackle urgent situations.

"What is Rs 18,000 crore (revenue giveaway as income tax sops) in a Budget of Rs 27 lakh crore," Jaitley asked during an interaction with reporters through video-conferencing from New York where he is convalescing after a surgery.

The former Finance Minister, who is now Minister without portfolio, said these critics should make a substantive objection and say "I am even opposed to the exemption for those with income upto Rs 5 lakh" and not offer procedural objections.

"These are small taxpayers who need relief and who will make higher spending that will come back as indirect taxes," he said.

Jaitley referred to the interim Budgets of 2009 and 2014 and said they contained tax proposals on the indirect side.

The fiscal stimulus package was announced, in fact, during the reply to the Interim Budget in 2009, he said.

He said the tax relief for income up to Rs 5 lakh was only logically expanding on the earlier Budget measure of raising the limit from Rs 2 lakh to Rs 2.5 lakh with an additional benefit of Rs 50,000.

On direct income support announced for small farmers, he said it could go hand-in-hand with subsidies as the government needed to support farmers through whichever instrument possible.

The Budget has addressed rural India's problems on the back of government's emphasis already given to building of rural roads, MGNREGA scheme, sanitation, housing and electrification given over the last five years.

To another question about how the government would ensure benefit of the direct income support scheme to land-less farm workers, Jaitley said the government did not have statistics on micro issues.

The government only has record of landowners and it cannot identify contractual labourers, he said.

He said the government cannot wait for that data and had to move ahead with a solution to resolve the problem.

He dared the critics of the scheme to top it off in their respective states, saying the farmers will thank them.

--IANS

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