New Delhi, February 1
The Congress on Wednesday questioned the growth figures projected in the Budget and termed the tax slab rejig as a move to abolish all tax exemptions to the middle class.
Addressing a press conference, former Finance Minister P Chidambaram and Congress spokesperson Gourav Vallabh dwelt on the proposals to increase rebate limits in personal income tax and asked how many have actually moved to the new tax regime.
“What is the proportion of IT payers who have moved to the new tax regime. The data is not available. What about those who are in the old tax regime. There is no relief for them clearly,” said Chidambaram, adding, “Tax exemptions should be abolished, that is the ultimate goal of the government”.
In his written statement, Chidambaram elaborated: “No taxes have been reduced except for the small number who have opted for the new tax regime. No indirect taxes have been reduced. There is no cut in the cruel and irrational GST rates. There is no reduction in the prices of petrol, diesel, cement, fertilizers etc. There is no cut in the numerous surcharges and cesses which are, any way, not shared with the State governments.”
The former Finance Minister questioned the growth figures in the Budget papers.
“Last year, the government estimated the GDP for 2021-22 at ₹232,14,703 and, assuming a nominal growth rate of 11.1 per cent, projected the GDP for 2022-23 at ₹258,00,000 crore. The GDP for 2021-22 has been since revised upward to ₹236,64,637 crore. In today’s Budget papers, the GDP for 2022-23 has been estimated at ₹273,07,751 crore which yields a growth rate of 15.4 per cent, much above the earlier estimate. Given this impressive number, real GDP ought to have grown in double-digits. Yet the FM (and the Economic Survey) put the GDP growth at only 7 per cent this year (para 2). Will the government explain?” he asked.
He said the claim of real GDP growth is in the face of lower capital expenditure. Citing Budget figures, he pointed out that Capital Expenditure of the central government and the Effective capital expenditure are lower than the Budget Estimates. “So, what drove growth in 2022-23? We know that private investment is down, exports are down and private consumption is stagnant. So, how does the government explain the 7 per cent growth in the current year?” he asked.
“Besides, in 2022-23, the growth rates in Q1 and Q2 have been estimated at 13.5 per cent and 6.3 per cent, respectively. So, we already have 9.9 per cent growth in the first half of the year. If the whole year will only yield 7 per cent, does that mean that Q3 and Q4 will record growth rates of only 4 to 4.5 per cent. For the whole year, therefore, quarterly GDP growth rate is sliding: 13.5, 6.3, 4.2 and 4.0 per cent,” he said.
Turning to other numbers, he pointed out that the government is not spending what was promised on key schemes. In Agriculture and Allied Activities during FY22-23, the Budget Estimate (BE) was Rs 83,521 crore and the Revised Estimate (RE) was ₹76,279. In PM Kisan the BE was ₹68,000 crore and RE was ₹60,000 crore. In Education, BE was ₹104,278 crore and RE was ₹99,881 crore. In Health, BE was ₹86,606 crore and RE was ₹76,351 crore. In Social Welfare, BE was ₹51,780 crore and RE was ₹46,502 crore. In Urban Development, the BE was ₹76,549 crore and RE was Rs 74,546 crore. Similar was the case for umbrella schemes for development of SC/ST, minorities and others.
Chidambaram said this is a “callous” Budget that ignores the vast majority of the people and benefits only the billionairs.