New Delhi, Aug 8 (UNI) Amid criticism over plummeting households savings, Union Finance Minister Nirmala Sitharaman on Thursday said that the country is witnessing a shift towards smart portfolio diversification and small savings are finding portfolios which are giving better returns.
Replying to the combined discussion on Jammu and Kashmir Appropriation (No.3) Bill, 2024, Appropriation Bill (No. 2), 2024 and the Finance Bill (No.2), 2024 in the Rajya Sabha, the Minister said that instead of putting money in a fixed deposit people are investing money in properties.
“Growth in housing sales in cities has been particularly impressive indicating that urban households are diversifying the deployment of their savings. In 2023, residential real estate sales in India were at their highest since 2013, witnessing a 33% year-on-year growth with a total sales of 4.1 lakh units in top eight cities,” Sitharaman said.
The Minister highlighted that the Union Budget has extended relief to the Middle class and reduced their tax burden.
“Compared with very many developed economies which have actually increased the tax rates, despite the pressure from Covid times we have actually reduced the burden on the Middle class substantially,” said the Finance Minister in her reply.
After the Minister’s reply, the three key bills were returned to the Lok Sabha. The Lower House has already passed these Money bills.
The Finance Bill includes an amended Budget provision offering taxpayers the option to choose between a 12.5% Long-Term Capital Gains (LTCG) tax rate without indexation or a 20% rate with indexation for properties acquired before July 23, 2024.
“Having heard a lot of inputs from people, we brought an amendment and changed. So the current tax proposal gives an option to taxpayers on LTCG on real estate before July 23 (2024),” Sitharaman said.
The Minister underscored the government’s emphasis on capital expenditure given its multiplier effect and contribution to economic growth.
“Keeping in line with the vote on account budget which was passed in February, the Budget 2024 which was presented on July 23 highlights and continues the feature that capital expenditure will be sustained as was indicated earlier at Rs 11.11 lakh crores and this will include Rs 1.50 lakh crores which will be given as financial assistance to states for capital expenditure which is interest free for 50 years,” she said.
She further said that high capital spending and the multiplier effect of it has sustained India as a fastest-growing economy continuously since after Covid and the country shall be the fastest-growing economy even this year.
Sitharaman said that the total resources proposed for transfer to states in 2024-25 is estimated to be Rs 22.91 lakh crores which entails an increase of about Rs 2.49 lakh crores over 2023-24.
“Similarly, outlays for all Union Territories have increased from Rs 61,118 crore in BE 2023-24 to Rs 68,660 crore in 2024-25. This is for all Union Territories,” she said.
“In a nutshell, the Union Budget this year balances several overriding imperatives — growth, employment, welfare spending, capital investments and fiscal consolidation,” the Finance Minister said.
