Union Finance Minister Nirmala Sitharaman had the Friday task cut out for her -- she had to step in Arun Jaitley's large-sized shoes and had to pull the economy out and through the five-year low.
On July 5, all eyes were on Sitharaman, India's first full-time woman finance minister. Her parents were at the Parliament too -- to witness the historic moment -- when their daughter would present the Union Budget 2019-20 in the Lok Sabha.
The Budget also happened to be the first of the Modi 2.0 government. And as per the size of the National Democratic Alliance's (NDA) victory over its opponents, Sitharaman's maiden Budget speech was a giant-sized bag of chocolates -- a mix of all flavours (read: some might not be your favourite).
In her maiden Budget speech, Sitharaman fully partook in Prime Minister Narenrda Modi's vision of inviting funds for infrastructural development of the country, and, perhaps, proved 'the lady was not for turning' -- after all, the lady of the hour is no less than the 1980's Iron Lady.
BREAKING AWAY FROM TRADITIONS
Nirmala Sitharaman was, on May 31, allocated the Ministry of Finance and Corporate Affairs -- one of the most important ministries for India.
The 59-year old former JNU student, Nirmala Sitharaman is, hence, only the first Indian woman to hold the portfolio of the Minister of Finance and Corporate Affairs -- full fledged. Former prime minister Indira Gandhi was the finance minister in 1970-71, but that was a charge in addition to her prime ministerial duties.
When she was the defence minister in Modi Sarkar 1 (or NDA I), Sitharaman was -- again -- the first Indian woman to hold the portfolio. Incidentally, it was Indira Gandhi who had held the additional portfolio of defence ministry while she was the prime minister.
No easy feat to achieve. But doing away with cliches has been Sitharaman's middle name.
Speaking of breaking away from traditions, Sitharaman posed for the shutterbugs ahead of the Budget announcement with a red fabric folder -- a diversion from the age-old practice of carrying a regular maroonish/brown briefcase.
For the unversed, posing for the shutterbugs with the Budget briefcase is a peculiar ritual that takes place right outside the Parliament on the Budget day.
Inundated with couplets, the speech was about two-hour-fifteen-minute long -- still falling short of Sitharaman's two-and-a-half-hour assault on former Congress president Rahul Gandhi in the Lok Sabha, in January this year.
The assault was a point-by-point rebuttal to Rahul Gandhi's allegations against Prime Minister Narendra Modi regarding NDA's Rafale jet deal -- in a heated debate in Parliament in January, 2019, punctuated by questions and accusations from the Opposition.
Sitharaman fought with all her intellectual armoury to defend her prime minister and her government in capacity of the defence minister.
Such is her loyalty towards PM Modi that when given the responsibility of the finance ministry, Sitharaman fought 'like a woman' and presented, perhaps, one of the most wholesome Budgets in a long, long time.
Right from agriculture, infrastructure, education to even minor sectors like fisheries and bamboo cultivation, Sitharaman, in her maiden speech, ensured that every sector was adequately taken care of.
It was for the first time any government made an effort to provide adequate drinking water to every citizen of the country. Under the Jal Ministry, Sitharaman spoke about taking piped water to every household of the nation.
While delivering her maiden Budget, Nirmala Sitharaman also quoted a verse from the poem ‘Purananooru’, a Tamil Sangam-era literature piece which deals with the life of a King.
The point in reference was taxation and her gratitude towards the "honest taxpayers". She said, "At this juncture, I find wisdom in a line from Purananooru which is a Sangam Tamil literature piece. This was sung as an advice to the Pandian king Arivudainambi by Pisiranthaiyaar. It’s a long verse; I’m picking the first line, some lines from the middle and the end."
She then went on to explain the meaning of the poem.
“A few mounts of rice from paddy that is harvested from a small piece of land would be sufficient for an elephant. But what if the elephant itself enters into the field and starts eating? It would eat far lesser than what it will trample with its foot. I hope the meaning is clear,” she said, adding, "the government does not want to trample anyone."
Sitharaman then thanked the taxpayers and said it was because of them the nation was progressing.
Sitharaman is the sixth finance minister from Tamil Nadu to have presented the Union Budget.
Another quote she recited was an Urdu couplet that said: "Yaqeen ho toh koi raasta nikalta hai, hawa ki ot bhi le kar chirag jalta hai. [You can find a way if you believe. Just like an earthen lamp can also lighten up despite the air blowing around.]"
Nirmala Sitharaman also quoted a sutra from Chanakya Neeti: "Kaarya purusha kare na lakshyam sampa dayate. [If we have determination, the task will be accomplished.]"
The point in reference was India's target of becoming a $5 trillion economy in the next few years. She said people doubted if this could be achieved, but the government had faith.
And when she spoke about women empowerment, Sitharaman made a reference to one of the letters written by Swami Vivekananda.
"There is no chance of welfare of the world unless the condition of women is improved. It is not possible for a bird to fly on one wing," she said.
Sitharaman was poised, yet stoic. She spoke like a pro and never did for once the listener felt like giving up on paying attention to her -- a sign of a great orator.
FRIENDS AND FOES
PM Modi seemed mighty impressed with his frontline attack on the Opposition.
Every time the camera panned on to PM Modi, he looked relaxed. Attentive, but non-chalant. He knew he had one of his best at the centrestage.
The camera was quite frequently panned on to Rahul Gandhi too, who sat with his mother, United Progressive Alliance (UPA) chairperson Sonia Gandhi.
The Gandhis looked serious, indulgent and, for the lack of a better word, grumpy.
To Sitharaman's left was BJP chief and newly appointed home minister, Amit Shah. And her MoS Anurag Thakur sat obliquely adjacent to her seat.
Her proposals were met with the thumping of desks -- of which even the senior BJP leaders were a part.
The loudest cheer was heard when Sitharaman quoted the above-mentioned Urdu couplet.
Sitharaman on Friday hiked tax on petrol and diesel, raised import duty on gold, levied additional surcharge on the super rich and brought a tax on high value cash withdrawals as she sought to spur growth with reduction in corporate tax and sops to housing sector, start-ups and electric vehicles.
The Budget also proposed measures to ease liquidity crisis facing shadow banking sector (NBFCs) and providing Rs 70,000 crore capital to public sector banks while seeking to raise additional resources through privatisation of some PSUs.
In relief to taxpayers, Sitharaman provided for an additional deduction of Rs 1.5 lakh on interest paid on loans borrowed up to March 31, 2020 on purchase of a house up to Rs 45 lakh.
Corporate tax on companies with turnover of up to Rs 400 crore was slashed to 25 per cent from current 30 per cent. Presently, the lower tax rate is applicable on companies having a turnover of up to Rs 250 crore.
Sitharaman said the reduced tax rate would cover 99.3 per cent of corporates in the country.
To boost use of electric vehicles, an additional income tax deduction of Rs 1.5 lakh on interest paid on loans taken to purchase EVs was proposed.
Also, the government asked the GST Council to reduce tax rate on EVs from 12 per cent to 5 per cent.
Addressing the angel tax issue faced by startups, Sitharaman said startups and investors who file requisite declarations will not be subjected to any kind of scrutiny in respect of valuation of share premium.
A mechanism of e-verification will be put in place and with this, the funds raised by startups will not require any tax scrutiny.
Sitharaman raised special additional excise duty and road cess on petrol and diesel by Re 1 per litre each, saying lower crude oil prices provide her with an opportunity to review taxes on the sector.
Also, customs duty on gold and precious metals was raised from 10 per cent to 12.5 per cent to mobilise resources.
Basic customs duty was raised on an array of products including tiles, cashew kernels, vinyl flooring, auto parts, some synthetic rubber, digital and video recorder and CCTV camera.
Excise duty of Rs 5 per 1000 was imposed on cigarettes of length exceeding 65 mm, while 0.5 per cent duty was levied on chewing tobacco, zarda and tobacco extracts and essence.
"I propose to levy TDS of 2 per cent on cash withdrawal exceeding Rs 1 crore in a year from a bank account," she said.
Sitharaman also announced a surcharge on individuals having taxable income of Rs 2 crore to Rs 5 crore and for those above Rs 5 crore which will hike their effective tax rate by 3 per cent and 7 per cent respectively.
Sitharaman also proposed to made Aadhar and PAN interchangeable for the purpose of filing Income Tax returns.
To boost FDI inflow into the country, the government will examine further liberalisation of sectoral investment caps in aviation, media, animation and insurance.
The Budget also proposed 100 per cent FDI in insurance intermediaries and easing of local sourcing norms for single brand retail.
She said measures were being worked out to ease filing returns and tax compliance. Taxpayers with an annual turnover of less than Rs 5 crore will have to file only quarterly returns.
To boost cash-less economy, she said business establishments with annual turnover of Rs 50 crore would have to use BHIM, UPI, Aadhaar Pay, NEFT, RTGS modes of payments with no charges or merchant discount rates will be imposed on customers or merchants.
RBI and banks will absorb these costs.
The Securities Transaction Tax or STT was proposed to be restricted to the difference between settlement and strike price of options.
She proposed an additional income tax deduction of Rs 1.5 lakh on interest paid on loans taken to buy electric vehicles. This will lead to a benefit of Rs 2.5 lakh crore over the tax period of the loan for the payer.
She said the government would spend Rs 100 lakh crores for infrastructure in next five years.
The disinvestment target for FY20 was raised to Rs 1.05 lakh crore from Rs 90,000 crore set in the interim budget and government will continue with disinvestment of PSUs in the non-financial space as well.
Regulation of housing finance companies was moved to the Reserve Bank of India (RBI) from the NHB.
The government also proposed to allocate Rs 70,000 crore for PSU Bank recapitalisation.
(With inputs from agencies)