New Tax Regime To Have Adverse Impact On Taxpayers' Savings, Claims SJM

The new income tax regime may give relief to taxpayers in terms of ease in filing returns with a lower tax burden but it can have an "adverse impact" on their savings, the Swadeshi Jagran Manch (SJM) claimed on Friday.

The affiliate of the Rashtriya Swayamsevak Sangh (RSS) urged the Centre to tweak the new tax regime to promote savings by the middle class.

"As expected, the income tax burden in the new tax regime has been reduced for the middle class and for the ultra-rich which will have an impact on the total revenue of Rs 37,000 crore," SJM co-convenor Ashwani Mahajan said in a statement.

"The Swadeshi Jagran Manch believes that the new income tax system may give relief to the taxpayers in terms of ease in filing returns with lower tax burden but it can have an adverse impact on the savings being made by income-tax payers," he said.

The SJM impresses upon the government to "tweak" the tax regime to promote savings by the middle class, he said.

Finance Minister Nirmala Sitharaman presented the Union Budget for 2023-24 in Parliament on Wednesday.

The SJM termed the Union Budget "growth-oriented" and welcomed various provisions made in it but underscored the "lack of sufficient efforts" on the part of the government needed to promote manufacturing in India.

India is witnessing a trade deficit and "unprecedented imports" from China today but the same could not catch sufficient attention of Finance Minister Sitharaman, Mahajan said, demanding that the Centre put a curb on imports from China by increasing tariffs.

"We urge the government to increase tariffs on products where there exists sufficient excess capacity. This will curb import from China and promote manufacturing in the country," he said.

Mahajan said it was expected that there will be an emphasis on manufacturing in the Union Budget for 2023-24.

"The Swadeshi Jagran Manch expresses its dissatisfaction over the lack of sufficient efforts taken to promote manufacturing," he said, adding the government should have hiked tariffs on products, "both final as well as intermediate".

Mahajan said the allocation of government expenditure is the mirror of its policies and that is “perfectly getting reflected in the budget.”

“The SJM expresses its happiness over the allocation for infrastructure, rural development, green growth, education and digitization in the budget,” he said.

Mahajan said promotion of millets in the International Year of Millets, hike in agricultural credit with focus on allied activities like dairy and fisheries are among the "major attractions" of the budget.

“Increase in agricultural credit target to Rs 20 lakh crore is a welcome step. It will give a boost to all agriculture and allied activities,” he said.

Allocation for irrigation in the drought-prone areas is “yet another attempt to fostering more inclusive rural growth,” he added.

The SJM co-convenor noted that the government has raised the share of effective capital expenditure, which includes support to state governments for capital formation, to Rs 13.7 lakh crore, which is 4.5 per cent of the GDP. 

“It will benefit infrastructure building and other types of asset creation,” he said

The capital expenditure of Rs 2.40 lakh crore for the Railways, the provision of various types of other capital expenditure, including logistics of Rs 7500 crore "makes this budget special”, Mahajan said.

“This much capital expenditure is a record in recent decades,” he claimed.