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Finance Minister Nirmala Sitharaman said on Friday that the government will provide more money to the National Rural Employment Guarantee Scheme (NREGA) beyond the budgeted allocation for the next financial year (FY24) if the need so arises, amid criticism from the opposition that the Centre was cutting funds to the flagship scheme.
Replying to the debate on the Union Budget in the Lok Sabha, Sitharaman said the new personal income tax regime will leave the salaried with a higher disposable income, and that the budget had struck a delicate balance between growth and fiscal discipline.
“NREGA is a demand driven scheme, whenever there is an increase in demand, we have provided and will provide the sums required,” Sitharaman said, adding that the budget estimate (BE) for NREGA for FY24 factors in an economic recovery and a ‘massive increase’ in Pradhan Mantri Awas Yojana rural, and Jal Jeevan Mission.
The revised estimates (RE) for NREGA in the current financial year (FY23) stands at Rs 89,400 crore compared with BE of Rs 73,000 crore. The BE for FY24 is Rs 60,000 crore.
“We will provide the amount if there is an increase in FY24 (compared to budget estimates),” Sitharaman said.
Earlier this week, Chief Economic Advisor V Anantha Nageswaran had also said that the centre’s push towards rural housing and water supply infrastructure will lead to the kind of job creation in rural areas that justifies lesser allocation to its flagship rural employment guarantee scheme,
“One of the reasons why allocation for NREGA was lowered is because there is a much larger substantive increase in allocation. particularly in the rural component of PM Awas Yojana and Jal Jeevan Mission. The expectation is that the rural workers would be able to find jobs in these projects and hence there will be lower demand for NREGA work,” Nageswaran had said.
Replying in Lok Sabha, the Finance Minister stated that the new tax regime, which offers a rebate on annual income of up to Rs 7 lakh, will leave higher disposable income in the hands of people. She said that the new regime is now ‘very attractive’ as the tax exemption limit has been hiked to Rs 3 lakh, from Rs 2.5 lakh earlier. Besides, a standard deduction of Rs 50,000 too has been allowed under the scheme.
This new tax regime will benefit the majority of middle-class taxpayers, she said, adding that the rebate has been provided on an income of up to Rs 7 lakh. “Since the enhanced rebate limit is unconditional, it leaves higher disposable income in the hands of people,” Sitharaman said.
Under the revamped concessional tax regime, which will be effective from the next fiscal, no tax would be levied for income up to Rs 3 lakh. Income between Rs 3-6 lakh would be taxed at 5 per cent; Rs 6-9 lakh at 10 per cent, Rs 9-12 lakh at 15 per cent, Rs 12-15 lakh at 20 per cent and income of Rs 15 lakh and above will be taxed at 30 per cent. However, no tax would be levied on annual income of up to Rs 7 lakh.
“The budget astutely manages the needs for India’s development imperatives within the limits of fiscal prudence. It is a very delicately balanced act. We have made sure that fiscal prudence is maintained within the glide path,” Sitharaman said.
“It is a very, very delicately balanced Budget,” Sitharaman said, adding the government chose the capital expenditure route to revive the economy as it has a greater multiplier effect.
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