Sitharaman defends corporate tax reduction, Swamy slams her for bad economics

New Delhi: Finance Minister Nirmala Sitharaman allayed fears of corporate tax reduction impacting revenue collection by pointing out that the gross direct tax collection increased by 5 per cent till November.

The minister, replying to a debate on Taxation Law Amendment Bill, 2019 in the Lok Sabha, categorically denied there being any decrease in direct tax collection. Historically, maximum collection of direct taxes happens in the last quarter of the fiscal, she added.

The main objective of the reduction in corporate tax was aimed at attracting fresh investment in the manufacturing sector. Sitharaman said several domestic and global firms have expressed interest in investment post announcement of the reduction in the corporate tax rate.

On the liquidity issue, the finance minister said banks have disbursed about Rs 2.5 lakh crore during their recent outreach programme. Of this, Rs 1.5 lakh crore were fresh term loans.

The minister also dismissed the contention that the government was averse to criticism.

It is "unfair to say that government is not willing to listen to criticism," she said, adding that the government does listen and respond.

The remarks came against the backdrop of industrialist Rahul Bajaj's comments that India Inc was afraid of criticising the government.

'Sitharaman doesn't know economics'

Concerns brewed in the saffron camp as well. In a scathing attack on the Sitharaman, senior BJP leader Subramanian Swamy has said, “she doesn't know economics”.

Swamy's attack comes at a time when Sitharaman is defending the Modi government's economic policies and denying that there is a slowdown in the economy.

In a recent interview, Swamy said, "If you see the press conferences, she is handing the mic to civil servants to answer."

"What is the problem in the country today? Poor demand. Supply is not the problem. But what did she do? She relaxes taxes for corporates. Corporates are flushed with supply. They will just use it," Swamy said.

Nirmala Sitharaman is only the second woman (after Indira Gandhi) in the history of independent India to take up the mantle of the finance minister. 

'Too afraid of Modi to tell the truth'

Part of the problem, Swamy said in the interview was that Prime Minister Narendra Modi's advisors were too afraid to tell him the truth.

"The Prime minister knows nothing about it. He is being told ‘wonderful growth rate'," Swamy said.

Swamy has been positioning himself for the FM's post and had earlier been critical of Arun Jaitley also, but has been overlooked for the job.

"He doesn't want me," Swamy said about PM Modi. "He doesn't want any minister to talk back to him, let alone in public, but in private cabinet meetings too."

Swamy slammed the current growth figures and put out numbers closer to 1.5 per cent. said, "Do you know what the real growth rate today is? They are saying that it is coming down to 4.8%. I'm saying it is 1.5 per cent", Swamy said in the interview.

Swamy's Twitter account is full of tweets and articles which remind everyone that only he had warned of the economy going into a tailspin as early as 2015, four years back.

(With inputs from PTI)