The Rajya Sabha returned the Appropriation Bill and the Finance Bill to the Lok Sabha, thus completing the parliamentary approval process for the budget 2024-25.
The Jammu and Kashmir Appropriation Bill, too, was returned to the lower house on Thursday.
These bills have already been approved by the Lok Sabha.
Sitharaman said the government has kept its word on sticking to the fiscal glide path. “We have not cut down on allocations of social sectors. In agri and allied sectors, in fact, more is being given- ₹8,000 crore more than last year,” she said.
The FM listed allocations in education, agriculture, health and urban development to cite higher spending on social sectors this fiscal year against last fiscal year. The minister brushed aside the notion that private consumption has stagnated, citing various economic indicators that suggest consumption has not gone down. She said the government’s capex push has lifted the country’s growth. “The multiplier effect of capex has sustained India as the fastest growing economy in the world and we will continue to be the fastest growing economy this year,” she said. The Indian economy grew by 8.2% in FY24 compared to 7% in FY23.
“Global challenges are mounting every year – both wars (Russia-Ukraine and Israel-Hamas) haven’t abated, Red Sea problems, global currency markets, the Japanese carry trade that has impacted trust in global markets…all of these are the growing number of challenges that India is facing,” she said.
Responding to a comment on India’s low ranking in the Global Hunger Index, she said it is a flawed index as countries with weaker and war-torn economies such as Pakistan are ranked higher than India without any explanation.
Middle class & household savings
Sitharaman also dismissed the notion that there is a fall in net financial household savings, saying a small saving portfolio is not the only indicator. “India is witnessing a lot of changes in terms of smart portfolio diversification. So, individuals may not be investing in post offices or going for a fixed deposit… They are finding portfolios with better returns and are also investing in property,” she said.
The middle class is also investing in instruments such as the future and options, to her surprise, the minister said.
“You usually expect people with high disposable income to trade in future and options, but people have become smarter and are better informed even to put money there and get smaller returns for them,” she said.
She reiterated that enough steps have been taken in the budget to ease the tax burden on the salaried class, brushing aside the notion that the government has not done enough for the middle class. “India has reduced the burden on the middle class substantially at a time when many developed economies have increased tax rates despite pressure from Covid time,” she added.
The FM also defended the security transaction tax, adding that it is not for revenue but to bring big spending into the tax net.