The Lok Sabha is set to resume its discussion on the Finance Bill, a crucial legislative document that outlines the government’s economic policies, taxation structures, and fiscal planning for the upcoming financial year. The debate, already marked by sharp exchanges, gained prominence when Congress MP Shashi Tharoor strongly criticized the bill, characterizing it as a “classic case of patchwork” that fails to address India’s deep-rooted economic challenges.
In This Article:
Tharoor’s Scathing Criticism of the Finance Bill
During the discussion, Tharoor argued that the Finance Bill reflects the government’s lack of vision in addressing structural issues. He likened it to a mechanic who, instead of fixing the brakes, merely makes the horn louder—implying that the government is offering superficial solutions rather than resolving core economic problems.
“This Finance Bill is a classic case of patchwork solutions. At a time when the nation needs clarity, conviction, and decisive leadership, the government’s economic management finds itself struggling with deep-rooted structural challenges,” he stated.
One of Tharoor’s key arguments was against India’s Goods and Services Tax (GST) system, which he described as the “most complex tax in the world.” He compared India’s GST rates to other economies, highlighting that while China caps its GST at 13% and still collects 20% of GDP in tax revenues, India’s highest GST rate is 28%, but total tax revenues remain at only 18% of GDP. Similarly, he pointed out that countries like Vietnam (8% GST) and Thailand (7% GST) manage to achieve higher tax-to-GDP ratios than India.
He further criticized the multi-rate GST structure, stating that while 77 countries have adopted GST, most have only one or two tax slabs. India’s numerous tax slabs have increased compliance burdens for businesses, making tax collection inefficient.
BJP Defends Economic Policies
Defending the Finance Bill, BJP MP Nishikant Dubey countered Tharoor’s remarks, stating that India’s economic growth under the current administration has been remarkable. He highlighted that the economy has grown from USD 2 trillion to USD 4.5 trillion over the past decade.
“The Budget is not meant to provide a magic solution to all economic issues overnight. It is a result of years of hard work aimed at benefiting the working class. The Congress party’s agenda is to oppose everything without considering the positives,” Dubey said.
Union Finance Minister Nirmala Sitharaman also intervened in the discussion to address concerns about corporate loan write-offs. Congress MP KC Venugopal had alleged that loans worth Rs 18 lakh crore had been written off under the BJP-led government. Sitharaman clarified that loan write-offs do not mean that the government has waived the money but rather that financial institutions are continuing to recover these debts.
Key Highlights of the Finance Bill
The Finance Bill plays a critical role in shaping India’s economic policies. Here are some of its major provisions:
- Taxation Reforms: The bill proposes adjustments to income tax brackets and corporate taxation to encourage economic growth.
- GST Adjustments: While the government has not significantly altered GST slabs, discussions indicate a possible review of the current multi-tiered structure.
- Fiscal Deficit Management: The bill emphasizes fiscal discipline and aims to bring the deficit within manageable limits.
- Investment in Infrastructure: The government has allocated substantial funds for infrastructure development, including roadways, railways, and digital infrastructure.
- Ease of Doing Business Initiatives: Measures are being introduced to reduce bureaucratic hurdles and simplify tax compliance for businesses.
Impact on Businesses and Citizens
The Finance Bill directly affects businesses, salaried employees, and consumers. While taxation reforms may provide relief to some, the compliance burden under the GST structure remains a concern. Businesses, particularly small and medium enterprises (SMEs), continue to struggle with the complex tax filing process.
For salaried individuals, changes in income tax structures may influence disposable income. Additionally, inflationary pressures remain a crucial aspect, with fuel prices and essential commodities continuing to impact household budgets.
The Road Ahead
As the Lok Sabha resumes discussions on the Finance Bill, both the ruling party and opposition will continue to present their arguments. The outcome of these debates will shape the final version of the bill, impacting the country’s economic trajectory for the coming year.
While the government remains firm in its economic approach, the opposition’s concerns regarding tax structure complexities, corporate loan write-offs, and fiscal mismanagement cannot be overlooked. With businesses and citizens keenly observing the developments, the Finance Bill discussion will be a defining moment in India’s economic policy landscape.
By – Jyothi
