The government has taken several measures during August and September to boost the economy, she said at the HT Leadership Summit here. Besides, she said, the public sector banks have disbursed nearly Rs 5 lakh crore without compromising on prudential norms in the last two months to boost consumption in the hinterland.
She had earlier, while responding to a discussion in Parliament, said changes in personal income tax could be considered “on merit” and not necessarily in the context of reductions in corporate tax announced recently.
“So there are ways for giving stimulus for consumption. We are adopting a direct method and also the method through which we are spending on infrastructure, whose spillover can go to core industries, labour and so on,” she said.
Asked if there could be more measures announced to bolster economic activity, she said, “If I say ‘yes’, it will be when and if I say ‘yes’ it’s also going to be back to me saying are you not too close to the Budget. So I don’t want to say ‘yes’ although I am wishing I can say. At the same time, I will not say ‘no’, because we are working on more.”
Asked if the government is considering rationalisation of personal income tax rate for putting more money in the hands of people, the finance minister said, “One among many things that we are thinking of.”
Following the reduction in corporate tax in September, there has been a growing demand for a slash in the personal income tax to buttress consumption.
In the biggest reduction in 28 years, the government in September slashed corporate tax rates up to 10 percentage points as it looked to pull the economy out of a six-year low growth with a Rs 1.45 lakh crore tax-break.
Assuring that there will be no harassment of taxpayers, Sitharaman said the intent of the government is to further simplify taxation systems including removal of exemption.
Citing the example of corporate tax, she said, “From now on, they’re moving towards a greater simplified and exemption-free, harassment-free and therefore subjective interpretation- free taxation regime.”
On the Goods and Services Tax (GST), the minister said the rate structure will have to be decided by the GST Council.
Eventually, the rates have to be rationalised and entire tax system has to be simplified, she added.
“One, tax per se, is getting complicated because of this unstructured bringing down of rates. Another, it’s also getting complicated because you want to be sure that you’re doing everything correct, but ending up asking for so much more information in a technology-driven system. People just get fed up of wanting to give so much information. So, we have problems in both the hands,” she said.