Finance Minister Nirmala Sitharaman on Thursday dismissed the Opposition’s claims of the Union Budget favouring only NDA-ruled states as “unfounded”.
Replying to the debate on the budget in Rajya Sabha, the minister said the budget came at a time when “external challenges” were severe, talk of globalisation was accompanied by “fragmentation in the world”, and “free market” beliefs accompanied increasing tariff barriers.
Garib (poor), youth, annadata (farmers) and naari (women) were four crucial groups taken into consideration while drafting the budget, Sitharaman said.
She said the government has kept the goals of accelerating growth and encouraging private investment. Sitharaman also countered the Opposition’s charge that the budget focused only on boosting consumption and neglected capital expenditure. Effective capex, said the minister, includes core capital outlays in the budget and grants-in-aid for the creation of capital assets in the states.
“So, though grants-in-aid are accounted as revenue expenditure in the books of the Union government, they go to the states to create capital expenditure. So, they are effectively, eventually, only capital expenditure,” she added.
The budget’s capex, she said, is projected at `15.48 lakh crore, as against revised estimates of `13.18 lakh crore in 2024-25. “So there is no reduction. If we take this together with what is done by the public enterprises from their own resources, the capital outlay for 2025-26 is likely to be `19.8 lakh crore,” she said.
Attacking the Congress, Sitharaman said former finance minister P Chidambaram should tell Opposition-ruled states not to cut down on capital expenditure. “From 2004, when capex was 31%, it came down to 16% of the budget by 2014.”
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On the Opposition’s charge that inflation was hardening, she said, “As per yesterday’s data, the CPI inflation for January 2025 fell to 4.31% from 5.22%. This is now closer to the lower end of the RBI’s inflation targets.”
On depreciation of rupee vis-a-vis the US dollar, Sitharaman argued that the rise in dollar index and the depreciation of other currencies relative to the dollar was a global trend.
On claims that the income tax relief was going to make the rich pay less, Sitharaman said while there was 100% tax relief on income till `12 lakh per annum, those earning `24 lakh would be paying 26.82% lesser tax than before, those earning `50 lakh per annum would pay 9.24% less than earlier, and those earning `1 crore per annum would pay 4.08% less in taxes.
She also said there has been no reduction in money spent on the social sector.
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