‘Won’t induce individuals to invest through govt schemes’

New Delhi: Finance minister Nirmala Sitharaman on Saturday said the new tax regime will benefit the middle class as it will leave more money in their hands.

Talking to reporters after the customary post-Budget address to the central board of the RBI, she said it is not necessary to induce individuals to invest through government schemes but give them an opportunity to make a personal decision regarding investments.

“...the way we allowed for standard deduction and also the rates which have been fixed, tax rates which have been fixed for different slabs, it has actually left more money in the hands of the people, the taxpayer, the household,” she said.

Sitharaman in her latest Budget proposed to extend the Rs 50,000 standard deduction benefit to persons opting for the new tax regime.

“I don’t think it is necessary for the government to even induce any such measures. A person who earns his money and who runs his household is wise enough to know where he has to put his money... So I’ve not discouraged him from doing it nor am I incentivizing them to do anything in particular. It’s for him to take a call,” she said.

Under the revamped concessional tax regime, which will be effective from the next fiscal, no tax would be levied on income up to Rs 3 lakh. Income between Rs 3-6 lakh would be taxed at 5 per cent; Rs 6-9 lakh at 10 per cent, Rs 9-12 lakh at 15 per cent, Rs 12-15 lakh at 20 per cent and income of Rs 15 lakh and above will be taxed at 30 per cent. However, no tax would be levied on annual income of up to Rs 7 lakh.

This measure of the government was purely to reduce the tax burden on the middle class and is aligned to the promise which was made a couple of years ago of simplifying direct taxation, she said.

Answering a question on the Adani Group crisis, the minister said: “Indian regulators are very, very experienced and they are experts in their domain. The regulators are seized of the matter and they are on their toes as always not just now.”

Responding to a query on price rise, RBI Governor Shaktikanta Das said retail inflation is expected to be around 5.3 per cent in 2023-24 and may fall further if crude prices remain benign.

Das said RBI has assumed $95 per barrel rate of crude for inflation projection for the next fiscal.

“So, if the oil prices go down significantly and if there is advantage of other commodity prices, it will work to (our) favour in terms of leading to lower inflation but if demand for oil due to the opening of countries (rises)... then the commodity prices may go up,” he said.

But having said that, he said: “I would like to add that the global economic outlook does not look as grim as it did about six months ago. The talk of a deep recession in many countries including advanced countries... that is behind us. Now the talk around the world is either a softer recession or just a global slowdown. So, therefore, the risks are evenly balanced. We have to wait and see how it plays out.”

On pricing of loans, Das said market competition will decide rates on lending and deposit sides as it has been a de-regulated segment.