Moneycontrol
Last Updated : May 21, 2020 07:53 AM IST | Source: Moneycontrol.com

FM Nirmala Sitharaman rules out any cut in income tax rates

"We are not looking at any tax related matter at this stage," Sitharaman said.

Finance Minister Nirmala Sitharaman said the economic stimulus package unveiled by the government under the Atmanirbhar Bharat Abhiyan will enable businesses to open up, which will then ensure workers are paid their wages.

In an exclusive interview to CNN-News18, she said the focus of the first package under the PM Garib Kalyan Yojana, which came soon after the lockdown was announced, was to ensure that no one goes hungry.

When the new package was ready for announcement, the message to us from the prime minister was to be careful not to leave out small businesses, Sitharaman said, adding that the package gives legislative support to ensure people are not drawn into insolvency.

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On the question of why the government did not choose to resort to suggestions of directly putting cash in the hands of the people, Sitharaman said: "Many have suggested that money should be given directly to the needy but I think this package announcement was the best way to help them."

Demand, she added, is created not just when you and I go to purchase bare essentials. "It is also the case when small units have to pay wages and fixed costs, companies open up and buy raw materials, payments made to wage earners who then make payments towards their bills and other things," she said.

She explained that the idea behind choosing this route was that the stimulus package will have a cascading effect. Businesses will now start, it will be ensured that wages are now given to the workers. That is how they will have cash in hand, she said.

The finance minister added that opening up of micro, small and medium enterprises (MSMEs) will trigger demand.

So, can one expect more stimulus measures?

Sitharaman ruled out any such announcements at present but left the door open for the same in future, stating: "I don't have anything more to announce at the moment."

She categorically ruled out any cuts in personal or indirect taxes at present.

"We are not looking at any tax related matter at this stage," she said.

Speaking on the impact of coronavirus on the economy, Sitharaman said any assessment can commence only when the lockdown is fully lifted.

With respect to the criticism from states regarding the conditional provision of additional borrowing, she said if the condition of reforms were linked to the money that goes to states under devolution, that would have been against the constitutional ethos of federalism.

However, the states had requested that the cap on borrowings be raised, and that is where we linked the same to reforms, Sitharaman said: "We have imposed reforms only on increasing the cap for state borrowing. The conditions being imposed on states are part of Finance Commission's recommendations. The reforms linked to additional state borrowing are for the good of the masses."

Commenting on the migrant issue, which has emerged as a slugfest between the ruling Bharatiya Janata Party (BJP) and the Indian National Congress, she said the lockdown extension caused some fear among migrant workers. Sitharaman blamed the Opposition, saying they have come across looking 'hypocritical' on the issue.

On the woes of migrant workers, she said: "We owe it to the migrant labour to have more coordination between the Centre and states."

Touching upon the contentious issue of restrictions placed on neighbouring countries on buying stake in Indian companies, the finance minister said she doesn't want Indian companies  to be bought cheap.

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First Published on May 20, 2020 05:48 pm
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