New Delhi: In the face of scathing criticism of the Union Budget — that it panders to the farm sector in a pre-election year at the expense of the middle class and the corporate sector — Finance Minister Arun Jaitley on Friday defended himself.
He said he had not given major relief to the middle class because the government has already done enough in the past Budget and will further provide succour in the future depending on fiscal space.”India faces a serious challenge in terms of compliances. India also faces a serious challenge in term of increasing the tax base and therefore if you analyse the sum total of my last 4-5 budgets, I have systematically given to the smaller taxpayer relief almost in every Budget,” he said.
He also asserted that the exercise is actually designed to boost overall economic growth with the help of all segments. Interacting here with corporate leaders following his Thursday presentation in Parliament, Jaitley said that a stressed agriculture sector was not in India’s interest, indicating thereby that boosting rural demand is a key in helping Indian industry, which is currently burdened with massive leverage, while banks struggle with their accumulated bad loans.
“To have a stressed agriculture sector and ramshackle infrastructure does not serve the country’s interests,” Jaitley said, adding that the farm sector had been under “a lot of stress for the last seven to eight years.” Noting that the stress in the agriculture sector “is real”, he said the philosophy behind Budget 2018-19 is that there remained “segments of the economy that need large amounts of government support,” although services are doing well and manufacturing had picked up in the last two quarters.
Asked about the small outlay for the ambitious health scheme, under which 50 crore poor people will benefit, he said more funds would be made available as they went ahead. But he clarified that the entire scheme will be funded by the state. The health ministry and NITI Aayog will work out the model for the scheme and select private hospitals, apart from government ones, will be a part of the plan, he said. ‘‘It is not on a reimbursement model because there are generally too many complaints about that,” Jaitley said.
He also defended not giving away major relief to the middle class and asserted that the government has already done enough in the past and will further provide succour in the future depending on fiscal space. On the crude oil prices having impact on fiscal maths, the Finance Minister said rising prices are a matter of concern but these are still within the comfort level. “I think India has got out of high inflation era and the inflation target of 4 per cent, plus or minus 2 per cent, is a reasonable figure and it is achievable,” he said.