FM cites Ujjwala, Jan Dhan to reject elitist barb

With her comment of not coming from an onion-consuming family being used to attack her for being elitist, Finance Minister Nirmala Sitharaman on Thursday cited her government's efforts to control onion prices as also its schemes such as free cooking gas to poor women and financial inclusion programme of Jan Dhan Yojana to say the Modi regime was not pompous.

During the debate in Rajya Sabha on the Taxation Laws (Amendment) Bill, 2019, that replaces the Ordinance promulgated in September offering corporate tax rate cuts, she was attacked by opposition parties for being 'elitist' and not sympathetic to the woes of the common man who faced the brunt of spike in onion prices during recent months.

Responding to the criticism, she said only her comment of not coming from a family that doesn't have much to do with onion was taken out from her reply in the Lok Sabha but not her 20-minute articulation of steps taken by the government to tackle the surge in onion prices including rushing truck loads from different states.

Also read: Belong to family that doesn't eat onion, garlic: FM

"Criticism of the economy is welcome... this government is continuously responding (to developing situation) and steps are being taken. You may like it or you may not like it. You may think it is adequate or inadequate, I am quite willing to buy that. But not an allegation that this government is elitist. Was (free LPG connection scheme) Ujjwala for elitist? Jan Dhan Yojna is it for elitist? PM Awas Yojana is it for elitist? So Ayushman Bharat is that for elitist?" she asked.

She then took a dig at former finance minister P Chidambaram for his reported response to price rise in 2012. "What was the statement given by the people who accuse me of being elitist when I am talking about onions being sent from (different states) and the government's effort. What was the statement given sir, then in 2012, when the price rise was high?"

Without naming Chidambaram, she said, "I would like to recall the statements of one of the former finance ministers that when price rise was the issue then, and this I am referring to 2012 when price was on the rise, food inflation was touching the sky and India was among the fragile five economies of the world."

"I am quoting sir -- 'When the urban middle class can buy a bottle of mineral water for Rs 15 and ice cream for Rs 20, why do they make such a noise about price rise'. And these are the people accusing me of being elitist and government of being elitist. I absolutely condemn this approach," she said.

Sitharaman again made a reference to the decisions made by Chidambaran as finance minister in UPA-1 when she sought to justify the rollback on higher surcharge levied on foreign portfolio investors in her maiden Budget.

Again without naming Chidambaran, she said fringe benefits tax and a tax on high-value cash withdrawal from bank accounts were brought in 2005 only to be "rolled back" in 2009 and 2008 respectively.

"For drawing money from your accounts, a tax was going to be levied in 2005 and again by a former finance minister who is a scholar in economics and talks about finance with great authority, he introduced it," she said.

The Rajya Sabha approved with voice vote the Taxation Laws (Amendment) Bill, 2019 that replaces the Taxation Laws (Amendment) Ordinance, 2019, promulgated on September 20, 2019, to cut the base corporate tax rate.

The amendment carries a negative list of industries that will not qualify for lower tax rate meant for manufacturing companies set up on or after October 1, 2019 but that begin production before 2023, she said.

The negative list includes computer software development, mining, and printing of books as they are not manufacturing per se, the minister added.

Sitharaman on September 20 announced the lowering of the base corporate tax rate to 22 per cent from 30 per cent for companies that do not seek exemptions and reduced the rate for some new manufacturing companies to 15 per cent from 25 per cent. Including surcharges and cesses (levies to raise funds for specific purposes), the effective corporate tax rate will drop by nearly 10 percentage points to 25.2 per cent.

The corporate tax cut followed other measures by the government to prop up slowing GDP growth adopted since the May general elections. These include efforts to reduce red tape and boost foreign direct investment (FDI), and plans to consolidate the state-owned banks.

While replying to a question raised by NCP lawmaker Supriya Sule in the Lok Sabha on Wednesday, Sitharaman said, "I don't eat much of onion and garlic. I come from such a family which doesn't have much to do with onion."

Sitharaman made the comment on her eating habits during a debate in the House on onion price rise across the country. Supriya Sule had raised the issue of NPAs and onion farmers.

"Why has the production of onion gone down? We export rice and milk and so many other products. Onion grower is a small farmer and he really needs to be protected", Sule had said.

Sitharaman during the reply to the debate on the first batch of supplementary demands for grants for 2019-20 in the Lok Sabha on Wednesday had stated that the government has taken several steps to check rising prices of onion and has initiated steps to improve technology for better storage of the kitchen staple.

Prices of onion in many places have crossed Rs 100 per kg.