The budget is by the people, for the people – Finance Minister
NEW DELHI New Delhi: Echoing Abraham Lincoln, Finance Minister Nirmala Sitharaman on Sunday described the Union Budget as “by the people, for the people, of the people” and said Prime Minister Narendra Modi was fully behind the idea of cutting taxes for the middle class but it took time to convince bureaucrats.
“We have heard the voice of the middle class” who were complaining about their aspirations not being met despite being honest taxpayers, she said in an interview to PTI. The honest and proud taxpayers wanted the government to do more to limit the impact of factors such as inflation, so the Prime Minister tasked Sitharaman to consider ways to provide relief.
She said Modi quickly agreed to the tax relief, but it took some time to convince officials of the Finance Ministry and the Central Board of Direct Taxes (CBDT) – whose job is to ensure revenue collection to fund welfare and other schemes.
Presenting her eighth consecutive Budget, Sitharaman on Saturday announced a hike in the personal income tax limit, below which taxpayers pay no tax, from Rs 7 lakh to Rs 12 lakh, along with a dispensation in the tax brackets that will help those earning above this to save up to Rs 1.1 lakh. The Rs 5 lakh hike in the exemption limit is the biggest ever and is equal to all the reliefs given between 2005 and 2023. “I think the Prime Minister summed it up, he said this is the people’s Budget, this is the Budget that people wanted.” When asked to describe the spirit of the Budget in her own words, she said, “As it is said in the words of Abraham Lincoln in democracy, this is a people’s Budget, by the people, for the people.” Sitharaman said the new rates will “substantially reduce the taxes of the middle class and leave more money in their hands, thereby boosting domestic consumption, savings and investment”. Explaining the thinking behind this big announcement, Sitharaman said the tax cuts had been in the works for some time.
One of the ideas was to make direct tax simpler and easier to comply with. Work on this began in the July 2024 Budget and now a new law is ready, which will simplify the language, reduce the compliance burden and be a little more user-friendly.
“It was not talking about rate restructuring, although for the last several years, we have been looking at ways in which the rates can be more reasonably favourable to taxpayers. And so that work was also underway,” she said. “Similarly, after the July Budget, there was this voice of the middle class, which felt they were paying taxes… but also felt they did not have much to redress their problems.”
It was also felt that the government was very inclusive in taking care of the very poor and vulnerable sections.
“So wherever I went, the voice was the same that we are proud taxpayers. We are honest taxpayers. We want to continue to serve the country by being good taxpayers. But what do you think about the kind of things you can do for us?” she said. “And so I also discussed this with the Prime Minister, who gave me specific tasks to see what you can do.”
