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We are not done with stimulus: Nirmala Sitharaman on reviving economy

A personal income tax rate cut for Sitharaman would difficult at this juncture.

Updated: Dec 07, 2019, 09.26 PM IST
Sitharaman stressed that the 4.5 per cent growth, the last set of figures on the gross domestic product growth, relate to the three months ending September.
NEW DELHI: Finance Minister Nirmala Sitharaman Saturday said the government was working on more steps, including rationalisation of personal income tax rates, to revive the sagging economy.

When asked if the government was considering rationalisation of the personal income tax rate for putting more money in the hands of people, the finance minister said, “One among many things that we are thinking of.” The GDP growth slowed down to more than six-year low of 4.5% in the second quarter of the current fiscal year from 5% recorded in the first quarter.

The government has taken several measures during August and September to boost the economy, she said at an event in Delhi. Besides, she said, public sector banks have disbursed nearly `5 lakh crore without compromising on prudential norms in the last two months to boost consumption in the hinterland. “So there are ways in which for giving stimulus for consumption. We are adopting a direct method and also the method through which we are spending on infrastructure, whose spillover can go to core industries labour and so on,” she said.

Asked if there could be more measures announced to bolster economic activity, she said, “If I say yes, it will be when, and if I say yes it is also going to come back to me, saying are you not too close to the budget. So I don’t want to say yes although I am wishing I can say. At the same time, I will not say no, because we are working on more.”

On the goods and services tax (GST), the finance minister said, the rate structure will have to be decided by the GST Council. Eventually, the rates have to be rationalised and the entire tax system has to be simplified, she added. “One, the tax per se is getting complicated because of this unstructured bringing down of rates. Another, it is also getting complicated because you want to be sure that you’re doing everything correct, but end up asking for so much more information in a technology-driven system. People just get fed up of wanting to give so much information. So, we have problems in both the hands,” she said.

With regards to apprehension raised on the genuineness of data, she said, “There’s no doubt, we need to bring credibility back to the data.” The government is aware of the debate which is going on data and its credibility, she said, adding, the intention is to make sure that any kind of inappropriate methodology which is coming into the data will have to be addressed. “So we will have to work towards better credibility, we have to work towards making available data without any obstruction,” she said.

Asked how she reacts to criticism of her from various quarters, she said, “I don’t allow it to worry me. I am not inhuman. I do sometimes get affected by it. But I suppose it is part of the job. So, I can’t really wish it away. It comes, let it keep coming. I handled it.”

Assuring that there would be no harassment of taxpayers, Sitharaman said the intent of the government was to further simplify taxation systems, including removal of exemption. Citing the example of corporate tax, she said, “From now on, they’re moving towards a greater simplified and exemption free regime. Therefore, a harassment-free, a subjective interpretation-free taxation regime.” Besides, she said the government has introduced faceless assessment for direct tax and soon this would be introduced in indirect tax to eliminate harassment.
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