Finance Minister Nirmala Sitharaman and secretaries from finance ministry, in the post-Budget interaction with the media, elaborated on key Budget announcements from Rs-2 cess on petrol and diesel, 2 per cent TDS on cash withdrawal over Rs 1 crore in a year, fiscal deficit, corporate rate reduction to divestment. Excerpts from the media interaction:
On increase in Rs-2 cess on petrol and diesel
Nirmala Sitharaman: Global situation being what it is and India's public funding requirement being what it is, there is always this demand that funds should be mobilised without hurting individual taxpayers. Since petrol and diesel are not in GST and we did not want to levy additional tax on individual taxpayers (given public transport system has improved in many places), we raised the cess on petrol and diesel.
Apart from this, we also want to move from fossil fuel to bio-fuels as part of our commitment towards environment.
On 2% TDS on cash withdrawal over Rs 1 crore a year
Nirmala Sitharaman: What is the need for withdrawing Rs 1 crore cash from one account in a year? I don't comprehend the need for withdrawing such a large amount in cash. Whatever you want to do with the cash, please do it electronically, then there would be no TDS. But yes, if you are a taxpayer and filing returns then you can reconcile this. We are not against the transaction, we are against the cash.
On the challenge of maintaining a 3.3% fiscal deficit
Subash Chandra Garg, secretary, department of economic affairs: This is very carefully planned. The revenue sides when compared to the actuals of 2018-19, direct taxes have been forecast to increase by only 17.5 per cent as against 23-24 per cent earlier, indirect taxes are going up only by 15 per cent. These are very realistic targets. Non-tax revenues are also growing; we expect higher dividends.
On the expenditure side, it is same as the interim budget - there is only an increase of about Rs 2000 crore. All these are giving us a savings of Rs 6,000 crore as compared to the interim budget. This brings down the fiscal deficit target from 3.4 per cent to 3.3 per cent.
Some concerns were raised that there would be borrowings outside the Budget, we have managed to do some savings even there. We have brought down fully service bonds to Rs 56,000 crore from Rs 64,000 crore last year.
Corporate rate reduction
Nirmala Sithraman: We are only progressively moving towards the goal of 25 per cent corporate tax rate by including new industries.
Ajay Bhushan Pandey, revenue secretary: The revenue loss due to expanding the applicability of 25 per cent corporate tax on firms with annual revenue of Rs 250 crore to Rs 400 core would be around Rs 4,000 crore.
On the dividend from RBI and banking recapitalisation
Subshash Chandra Garg: RBI dividend is estimated to be Rs 90,000 crore. The Rs 70,000-crore infused through recapitalisation bonds would not be included in fiscal deficit numbers.
Nirmala Sitharaman: We have set ourselves a very realistic goal of Rs 1.05 lakh crore for the way disinvestment should happen done and the way the reform agenda gets fulfilled. And if it is necessary to push reform, because we do not want the economy to stagnate, disinvestment is important route.
We have set ourselves a target of bringing down the government stake to 51 per cent so that they are open to more investors.