Budget 2023: I belong to middle class, understand their pressures, says FM Sitharaman

At present, the government has not imposed any fresh taxes on the middle class, said Finance Minister Nirmala Sitharaman

Ahead of the Union Budget, Finance Minister Nirmala Sitharaman said on January 15 that while she is aware of the pressures of the middle class, it should be kept in mind that the present government has not imposed any fresh taxes on the citizens.

Sitharaman will present Union Budget for 2023-24 in the Lok Sabha on February 1 amid expectations that the government will raise the income tax limit and provide relief to the middle class taxpayers, besides others. This Budget holds special significance as it is the last full budget of the present government ahead of the general elections to be held in mid-2024.

"I too belong to the middle class, so I can understand the pressures of the middle class. I identify myself with the middle class, so I know," the minister said while speaking at a function organised by the Panchjanya magazine, an RSS - associated weekly.

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At the same time, the minister reminded the audience that the present Modi government has not imposed any fresh taxes on the middle class. Also, she added, income of up to Rs 5 lakh is exempt from the income tax.

India’s Budget 2023 comes amidst a looming global recession, a prolonged war, and monetary tightening across countries as stubborn inflation refuses to die down.

Sitharaman said the government has taken various measures like developing the metro rail network in 27 cities and building 100 smart cities to promote ease of living.

The minister assured them that the government can do more for the middle class as its population is growing, and it has become sizeable now.

"I quite recognise their problems. The government has done a lot for them and continue doing the same," she said without making any commitment. Sitharaman said the government has been raising the outlay on capital expenditure in each Budget since 2020.

For current financial year, she said, it has been increased by 35 percent to Rs 7.5 lakh crore as it has a multiplier effect on the economy.

On the banking sector, she said, the government's 4R strategy --Recognition, Recapitalization, Resolution and Reform--has helped in revival of public sector banks (PSBs).

As a result of this, non-performing assets (NPAs) have declined and the health of PSBs has improved greatly, she said.

The government implemented an unprecedented recapitalization programme for PSBs amounting to Rs 2.11 lakh crore to support capital adequacy and prevent their default.

PSBs turned the corner during 2020-21 with a combined net profit of Rs 31,820 crore supported by massive recovery, reduction in NPAs and windfall gains on their bond portfolio.

Subsequently, the combined profit more than doubled to Rs 66,539 crore in FY22 despite COVID-19 pressure. They had booked collective losses to the tune of Rs 2,07,329 crore for five straight years from 2015-16 to 2019-20.

The RBI last month said, banks' gross NPA ratio has fallen to a seven-year low of 5 percent and the banking system remains sound and well-capitalised.

Speaking about farmers, Sitharaman said the government is committed to doubling their income and has taken various steps in that direction.

On trade with Pakistan, she said the neighbouring country never offered Most Favoured Nation (MFN) status to India. Trade relations with Pakistan have suffered since the Pulwama terror attack in 2019, she said.

With regard to freebies, the minister said, promises have to be made keeping in mind the financial health of the state and there has to be full transparency about it.

(With PTI inputs)