No norms violated, Congress’ interim budget gave relief on SUVs of rich, ours will help middle class: Pi – Times of India

By on February 2, 2019
The interim Budget addresses immediate concerns of neo-middle class, farmers, unorganised sector and senior citizens and is not a violation of norms. PM Narendra Modi’s vision is holistic and covers all segments of society, particularly the most vulnerable, finance minister Piyush Goyal tells Sidhartha and Rajeev Deshpande. Excerpts:

How confident are you of reaching all beneficiaries of the income support scheme for farmers?
States will, of course, have to cooperate but I do not see any reason why states won’t do so unless they want to politicise the issue. But when we are offering benefits directly to bank accounts of farmers, and we are giving it as “maan dhan”, an honorarium, I hope none of the states politicise it.

How will it be different than other means of farm support?

We have earlier seen a loan waiver by Congress, where they promised something and gave 70% of that, put in lots of terms and conditions, and then it (waiver) reached a few people. The CAG had a lot of questions about correct identification, political patronage and traders and businessmen getting loan waivers. We are going to publicise the entire list in every gram panchayat. So, if there is any mistake, local people will themselves raise the issue. This will bring a lot of transparency. It will also help create a permanent database of farmers.

Piyush Goyal Graph

There is criticism is that Rs 6,000 is a small amount…
It’s sad. People in air-conditioned rooms, disconnected with the hard reality on the ground, don’t understand how valuable this is for a marginal farmer with half-an-acre or one acre. Rs 6,000 will be quite valuable considering it will come at a time when harvest is taking place and there is often some critical expenditure. This will supplement that. Separately, we are increasing loans to farmers. If any state feels more can be done, they are free to do so. We are only looking at it as a mark of respect for farmers for making India food secure. Similarly we have expressed gratitude to taxpayers.

Will you call this a targeted budget, which focuses on specific categories?
I don’t think so. High production of foodgrains in the last few years has helped us keep inflation low but also resulted in stress on agricultural prices. So, we have worked a two-pronged approach – the MSP increased to 1.5 times the cost of production – and now income support.

Did you violate convention with your proposals in the interim budget?
Not at all. In fact, the income support scheme and pension plan for unorganised sector workers will be introduced in the current financial year itself. As far as income tax is concerned, in 2014 interim Budget, Mr Chidambaram made changes in tax laws and gave concessions to SUVs and luxury cars. He used the interim budget to give incentives to rich people and to help industry. Can SUV and mid-segment and large cars be called a benefit to the common man? We have tried to see how we can take benefits to the new middle class. Our point is that TDS will start from April and people will need to claim refunds. The Rs 5 lakh coupled with all exemptions can apply to people earning up to Rs 7-8 lakh.

Have you set an enrolment target for the pension scheme?
We are looking at it taking it to 10 crore in the next three-four years. The scheme will be implemented by LIC because they have the network.

One of the problems with these schemes is that they are not inflation-linked. How do you ensure that someone who gets benefits 20 years later gets a reasonable amount?
That may be difficult because their contribution will also increase and many may not join. Rs 3,000, is a good amount compared to zero.

Since the proposals come ahead of elections, do they come with an eye on the elections?

We have never waited for elections. We did not launch the cooking gas programme or swachhata scheme with an eye on elections. We also need fiscal space so that the scheme is implemented within the fiscal headroom. We inherited unpaid subsidies of Rs 1.60 lakh crore, inflation was very high and there was a huge current account deficit. To set the economy right, rebuild macro economic fundamentals, to convert the country from fragile five to the fastest growing economy in the world, all this could not be done by waving a magic wand.

Does the math work out? Is everything provided for, given that there is discussion around your estimates?
There has been so much transparency and honesty in the Budget. Our fiscal deficit estimate was 3.36% of GDP. We could have easily adjusted it to make it 3.34% and stuck to the 3.3% estimate. But PM said that your job is only aggregation, you budget for whatever has come. He was clear that it has to be an honest budget. If you are adding expenses of Rs 20,000 crore for farm income support then it is only natural that deficit estimate will be a little higher. But the good part is that GDP has expanded after the revision by CSO, this (fiscal deficit) falls to 3.2% in the current year and 3.1% next year.

How would you respond to the controversy over jobs, or lack of them?
When the average GDP growth over five years is 7.6%, jobs are bound to be created. The nature of jobs is changing all over the world. Today, if I set up a power plant, let’s say solar or wind, it cannot relate to jobs created in an NTPC power plant. But for the same amount of energy, 14 to 15 times more people are engaged, but in different sectors in a distributed manner.

How do you respond to the situation you are describing?
A scheme like Mudra does that. As many as 70% of loans under this are to women. Almost 7 lakh crore worth of loans. So many businesses have been set up or expanded.

How does the Budget address this issue?

I have mentioned so many programmes. If 10 crore toilets were built, people must have worked to make them. Everything is not a sarkari job or one in a big factory. In your own organisation, consider how many are on regular payroll? I meet people who say they are not getting the workers they want.

So the unorganised sector, for which you have announced a pension scheme, is also without regular benefits available in the organised sector.

PM Modi’s thinking is always holistic. Build toilets, that means hygiene and better health. Give electricity and improve quality of life. Cooking gas means better health for the mother and kids. Eliminate middlemen through direct benefit transfers. Ayushman Bharat can cover 50 crore people. Direct support for farmers and also middle class now. A tax rebate that can apply to salaries up to Rs 60,000 a month. Even a businessman with an annual turnover of up to Rs 1.5 crore benefits in multiple ways, through a 6% presumptive tax on his business, tax rebate on his personal income and GST compensation scheme that allows 1% levy with a simplified return.

The Congress party has talked about a minimum income guarantee. How do you view it?

You have to think of what will happen to the fiscal and macro-economic fundamentals if Congress is proposing an income support that costs Rs 4 lakh crore. Alternatively, it may result in higher taxes on the middle class or a withdrawal of several subsidies. So you decide what should it be. If you divide Rs 4 lakh crore by 130 crore people, it works out to around Rs 3,000 or about Rs 8 per person per day.

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No norms violated, Congress’ interim budget gave relief on SUVs of rich, ours will help middle class: Pi – Times of India
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