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There was, however, no time frame set by the government to remove all exemptions, she told reporters after an interactive session with trade representatives and intellectuals on the Union Budget.
“At the moment we only started a second alternative with some exemptions removed or some exemptions included, although the original intention was to remove all exemptions and give a clear simplified reduced rate of income tax,” the finance minister said.
The Budget has introduced more tax slabs and offers higher limits provided the taxpayer is ready to forego all the existing exemptions and deductions including home loan interest, other tax savings investments. “We have not made up our minds as yet (on the removal of all exemptions)… We are trying step by step, move forward and no particular timeline given,” she said.
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On Sunday, she said based on simulation and assumption, 69 per cent of taxpayers would have benefitted and probably 11 per cent would have been “attracted” had the new tax regime been introduced last year.
When asked about the Supreme Court order on telecom companies’ payment of adjusted gross revenue (AGR) dues and the concerns expressed by some bankers, Sitharaman said it may not be proper for her to comment on the matter as there is a Ministry concerned looking into it. “The concerned ministry is looking into it. So, it may not be proper for me to comment on it,” the minister said.
To a query on allegations by the Telangana government that there was a decline in the devolution of funds to states from the Centre, she said the allocation is followed as per the recommendations of the Finance commissions and it is not true that the centre is not cooperating with states.
The finance minister said the Budget was prepared keeping the Fiscal Responsibility and Budget Management (FRBM) in mind even as she maintained she would be remembered for presenting the “longest prepared Budget” than for “longest speech” on it.
“So in a way, all these (measures) and more have been done that the FRBM, as an Act, we have to keep in mind and also comply with it. So we have not really breached the FRBM. We have not gone outlandish on it. We have kept fiscal discipline, which is a USP for both the Atal Bihari Vajpayee government and also for the Shri Narendra Modi government,” she said.
The Centre had earlier said it was committed to reducing the fiscal deficit — the gap between total expenditure and revenue — to 3 per cent of Gross Domestic Product (GDP) by 2020-21 and eliminate the primary deficit as per the FRBM Act.
The government has utilised ‘escape clause’ under the FRBM Act, which allows the Centre to breach its fiscal deficit target by 0.5 percentage points at times of severe stress in the economy, including periods of structural change and when growth falls sharply.