Economy

No tax increase to meet Covid spend: Nirmala Sitharaman

In an exclusive interview with BusinessLine, the Finance Minister said the government is making efforts to contain prices particularly of essential commodities

Finance Minister Niramala Sitharaman has ruled out any move to increase taxes to meet higher expenditure on account of the Covid pandemic.

“I have made clear that the explicit and stated position of the Prime Minister is that we shall not increase any tax. In fact, in my media interaction post Budget, I made it very clear that this Budget will not have anything collected in terms of increased taxes,” Sitharaman told BusinessLine, during an interview.

Click here to read the full interview

The Minister was explaining the government position, considering the additional expenditure on food, NPS fertiliser and vaccine and whether the Centre was thinking of increasing tax revenues including by bringing back the wealth tax.

Farm economy strong

On her perception of the growth this fiscal, with the Covid second wave ebbing and local lockdowns being relaxed, Sitharaman said: “Unlike last time, we decided not to have a national lockdown. The economy, therefore, did not come to a standstill. Industries continued working and economic activity and migrant workers were not affected. Two, road traffic was not impeded and some trains were also operating, helping continuation of activity.

“Like last time, agriculture retained its pace of growth. In fact, the highest ever procurement of rice and wheat by the government has happened this season. The procurement price was paid to farmers directly through DBT, in one payment. This is a first and helped farmers have money in their hands to consume.”

“I don’t want to talk numbers, but I think there is good sign of recovery,” she said.

Tackling inflation

Asked about the worrying rise in inflation numbers, Sitharaman said the government has been making efforts to contain prices particularly of essential commodities such as edible oil, fruits, vegetables, and foodgrains. “The Group of Ministers on essential commodities has been meeting periodically trying to take timely steps to keep prices under control,” she said.

“Pulses imports are being permitted… I think prices of pulses will cool down. Even on edible oils, the government is monitoring the situation.”

On whether the present rate of inflation is transient or is there to stay for some time, the Minister said, “we are making all efforts to make sure that there is no supply-side issue; no supply-demand mismatch… I can only say we are very watchful on how things are going to pan out. We will ensure that timely intervention is made.”

The Finance Minister said that “the global situation on oil prices is really worrying. We also should consider the exchange rate movement since 2014. All these influence the price of petrol-diesel.”

 

Published on June 30, 2021

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