Focus of Union budget was on providing stability post COVID pandemic: Finance Minister
Chennai: Union Finance Minister Nirmala Sitharaman on Monday said the budget presented by her on February 1 was a continuity of the previous budget last year which was more exhaustive in laying out the formulation, principle and then provide stability for revival from COVID-19 pandemic.
Addressing various industry leaders and representatives from trade bodies at an event here, she said the Union government in the budget has also taken up futuristic steps by looking at adapting technology with various sectors, like agriculture and spread digital programmes into medicine, education among others under the ‘[email protected]’ initiative.
“We wanted a sense of continuity from the previous budget which was lot more exhaustive in the sense of laying out a formulation, principles and so on. Then provide stability for the revival (of the economy) from the pandemic and above all give a predictability for the tax regime and these were the guiding principles (for presenting the latest budget),” she said.
The Finance Minister also said a meeting would be organised in coordination with the Union Ministry of Road Transport and Highways and Railway ministry to discuss about the transport of cement from southern regions to northern parts of the country.
Her comments come in the backdrop of a query raised by noted industrialist N Srinivasan, Vice Chairman and Managing Director of India Cements Ltd, on the occasion.
Srinivasan, in his query to Sitharaman, pointed out that 40 per cent of India’s limestone was available in southern parts of the country and unless the cement moves north, there would be a problem of shortage in the northern region.
“The cement industry will be blamed for cartelisation but what can we do as cement cannot be stored. If I store more than a certain amount of cement, we will be asked to close by the Ministry of Environment,” he said.
Responding to it, Sitharaman said: “We will organise a meeting with the Surface Transport Ministry (Ministry of Road Transport and Highways) and Rail Ministry. What is necessary, you can send us a note prior to the meeting.”
To another query posed by G R Anantha Padmanabhan, Managing Director, GRT Jewellery India Pvt Ltd, Sitharaman said relaxation on the Coastal Regulation Zone (CRZ) as sought by him, was an ‘attractive’ option and offers ‘good potential’ (to boost tourism).
“In terms of CRZ, our request is to be more practical like other countries. You can consider little relaxation on CRZ,” Padmanabhan said
To this, the Finance Minister said, “I do not know if I can respond immediately. There is good potential (to tap tourism)”.
Replying to another observation made by Apollo Hospitals Managing Director Sunita Reddy, Revenue secretary Tarun Bajaj said the whole idea of the government was to have broader tax, less tax cuts and each product should be sold based on its strength and not based on tax arbitrage provided by the government.
Reddy in her observation to the Finance Minister said the ministry may consider increase of the Central Government Health Scheme (CGHS) scheme to Rs 50,000 from the current Rs 30,000 to help increase in access to healthcare facilities.
She also sought the Centre’s help in extending support to healthcare providers through means such as ‘interest subsidies’, which was done during COVID-19 and infrastructure spending increased to 50 per cent of project cost as compared to the earlier 30 per cent.
Economic Affairs Secretary Ajay Seth intervened and said the focus of the government was on promoting healthcare infrastructure in Tier-II and Tier-III cities where large corporates do not go quite often. “There is a scheme for higher viability gap funding which offers one-time support for hospitals to be set up in Tier-II and III cities…,” he said.
In response to comments made by Vellore Institute of Technology (VIT), Founder and Chancellor G Viswanathan, Finance Secretary T V Somanathan said spending six per cent of the country’s Gross Domestic Product (GDP) was the joint responsibility of both the Centre and states.
“India has the lowest tax-to-GDP ratio in the world. We cannot compare tax-to-GDP ratio of countries like the United States which is at 40 per cent,” Somanathan said.
Viswanathan, in his query, had said for the last 50-60 years several commissions had suggested that 6 per cent of GDP should be allotted on education and India had not crossed 3.5 per cent till date.
Finance Minister Sitharaman said the government was willing to increase spending on education and added that there should be mobilisation of resources.
“We want to increase spending in education, but we should also think about the resource limitation, we need to mobilise resources, tax space has to widen,” she said.
Revenue Secretary Tarun Bajaj said this may not be true of VIT but the government was aware of some no-profit-no-loss institutions which were actually ‘huge profit’ institutions and the profits were taken through various means.
“In spite of all that we are closing our eyes and allowing tax exemptions on such institutions. I think there is also a need for people to say that there should be more curbs on the way you spend money so that actually there is no profit-no loss,” he said.