Sir, cutting down the corporate tax is not just good for headlines; it is not just good PR; it is not just good atmospherics, but it is a good reform, and this government, under our Prime Minister, now, in the second term, after taking up a lot of reformatory steps in the first tenure, is further committed to doing a lot of reforms and this step has come very quickly depending on the global trade environment and the investment climate in India, and further reforms shall continue.
So, it is not just atmospheric, it is not just headline; it is also a good reform that we want to go ahead with.
Sir, about Ordinances, quite a few Members have asked as to why we need Ordinances; why we can't go straightaway with the Bill. As I said, waiting for the next Budget is by itself a delay which we did not want considering the environment which was prevailing all over the world. We wanted to attract investment at the earliest. So, we did come out with an Ordinance. But, are Ordinances new? Particularly, those related to finance, are they new; are they rare; are they never done before? I will just want to explain by giving some data. Finance-related ordinances have been there before. The Governments have used them because there is a reason. When the Parliament Session is not on and the urgency is felt, the governments do have the discretion and the governments choose to use Ordinances. Between 2004 and 2009, under the UPA-1, a total of 36 Ordinances were passed of which 10 were finance-related Ordinances. Between 2009 and 2014, a total of 25 Ordinances were passed, six of them were related to finance. So, it is not a thing that never happens. It is completely the discretion of the Government to feel what is developing on the ground and if they think that is necessary, even finance-related Ordinances have been used. I just want to put that in context.
Sir, now, I go to addressing the specific issues raised by hon. MPs, there again, not in any particular order. I think, I had already referred to Dr. Amar Patnaik, talking about mining. The new rates do not apply to mining because they are not manufacturing. Mining may deserve a lot more support but then, this support is not for mining.
Then, Shri Ravi Prakash Verma had asked as to why is this only for foreign companies. The concessional rates provided in the Ordinance, and, now, in this Bill, are applicable only to domestic companies. We are not giving to foreign companies at all.
Shri Ram Chandra Prasad Singh had asked about the Direct Taxation Code. It is a very important point. The report of the task force has been submitted. We are certainly looking into it and it is under the examination of the Ministry.
Then, Shri Vijayakumar asked as to why this 15 per cent is not being given to existing companies. Sir, the idea of giving a lower tax rate for new manufacturing companies is because we want fresh investments to come in. It should not happen that a whole lot of existing production capacities and investments just transfer to the new one with no additional new investments coming in. So, the objective itself is to draw new investments. Therefore, we had taken a conscious call on them.
Again, Dr. Amar Patnaik had said, 'this would not benefit MSMEs.' No, it will certainly benefit because when we have said this concessional rate of 15 per cent is being offered to manufacturing companies, all companies, big, small, medium, micro, all of them will get this rate. So long as you are a part of the Companies Act, the small ones, the medium ones, all of them will benefit out of this.
Then, there was also this question about consumption rate. A lot has been said about declining consumption. I want to just give some statistics. Private consumption during UPA-2 was 56.2 per cent of the GDP. This increased to 59.0 per cent during the NDA-I. Even in the first half of 2019-20, that is, this year, private consumption was 58.5 per cent of the GDP, still about 2.2 percentage points higher than what it was during the UPA-II.
So, I just want to underline that decline is there between the first and second term of NDA, but when you compare it, we are very clearly, at least, two percentage points higher than what we were during the UPA times.
Sir, I would like to give a bit of an elaborate answer for one particular issue raised by the hon. Member, Shri Veer Singh. This is about personal Income-Tax. Other than the fact that the Direct Tax Code is under examination, other than the fact that I have had quite a few inputs coming from people who think it is time now that Income-Tax cut has to be considered, I am not commenting on it, but I would want to draw the attention of the House that a lot of personal Income-Tax related steps have been taken.
I just very quickly want to highlight the fact that in the past five years, the Government has provided Income-Tax relief and I want to mention a few steps. Under the Finance Act of 2014, the basic exemption limit was enhanced from Rs 2 lakh to Rs 2.5 lakh. Further, the said Act also increased the limit for claiming deduction under Section 80C of the IncomeTax Act, from Rs 1 lakh to Rs 1.5 lakh. That was done as a step in the personal Income-Tax arena. Again in 2017, the rate of Income-Tax on individuals, whose total income was between Rs 2.5 lakh to Rs 5 lakh, was reduced from 10 per cent to 5 per cent. Standard Deduction of Rs 40,000 was introduced for salaried tax-payers, as well as pensioners, again in 2018. It was further increased to Rs 50,000 in 2019. Lastly, in 2019, we also provided for full tax rebate for individuals having a taxable annual income up to Rs.5 lakhs under Section 87A of the Income-Tax Act.
Sir, I must thank the hon. Member, T Subbarami Reddy, because he has, every now and then, given us a lot of constructive and good suggestions in order that we handle the taxation-related matters.
Edited excerpt from the speech of Finance Minister Nirmala Sitharaman on the Taxation Laws (Amendment) Bill, 2019 in the Rajya Sabha, 5 December