Lok Sabha nod to finance, infra funding Bills

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Nirmala Sitharaman in Lok Sabha. (Photo: PTI)

The amended Finance Bill, 2021, and The National Bank for Financing Infrastructure and Development Bill, 2021, were passed in the Lok Sabha on Tuesday.

Finance Minister Nirmala Sitharaman answered several questions of Opposition members on both Bills, however, several leaders, led by Congress MP Ravneet Singh Bittu, said she did not respond to two important questions — one on tax on cooking gas and the other on MPLADs funds.

During the discussion on The National Bank for Financing Infrastructure and Development Bill 2021, Sitharaman said, “Very many honourable members have rightly pointed out, that this institution that we are going to create through a statutory provision is a very unique institution… Based on the lessons we have learnt from earlier institutions…. Infrastructure financing, project financing— long term, all have a very high risk area. The credit costs are very high. Long term assessments of the success of the projects are also on grounds that are not so establishable in terms of data…we know how a space which should have been occupied by development financial institutions gradually got filled in by commercial banks who did not, in their core business activity, have anything to do with long term financing. As a result, the absence of a long term financing institution was felt, equally the asset liability mismatch of the commercial banks also started standing out…”

With many members raising issues of taxes on petrol and diesel amid the demand to include them in GST, Sitharaman said states also tax fuel. “The highest tax today on petrol and diesel is in Maharashtra… I’m not pointing out whether one state is more or less. The point is that states also tax fuel, not just the Centre. And when the Centre taxes, it is part of a devolvable amount. If I collect 100 rupees from taxing petrol or diesel, of the 100 rupees, 41 rupees goes to states…” she said, adding that if the issue came up in the next meeting of the GST council, she would be glad to discuss it.

Among the many questions that Sitharaman answered during the discussion on the finance bill, she addressed concerns on the Agriculture Infrastructure Development Cess (AIDC), raised by several members. “The AIDC will have to go to the states because it is for improving the infrastructure in the APMCs [Agricultural Produce Market Committees]. It is for the farmyards to have better infrastructure. So the cess may be a cess that never gets devolved, but it is a cess which eventually is for the purpose of improving agriculture. Agriculture, farmyards and marketing yards being with the state governments, [the cess] will have to go to the states only,” she said.

NCP MP Supriya Sule raised questions on the defence modernisation fund.

“On the Defence Modernisation Fund, We had, in principle, agreed to it but no particular details have been worked out. If the Finance Commission has not recommended a particular formula, the fear that it might be imposed on states is not well-founded at all. We have not taken a call yet,” Sitharaman said in response.

Sitharaman also responded to a speech by BJD’s Pinaki Mishra in which he questioned the performance of the government on delivering targets of disinvestment.

Sitharaman said, “I fully concede that. In a year where your disinvestment was to be achieved, but your markets were tepid, we couldn’t move because… there were all kinds of stress in the markets. So I couldn’t see a prospect of being able to successfully engage in disinvestment. So, that year’s figures were not achieved. But I am hopeful now. Because post-Corona, and even during Corona, the way in which the market has been buoyant. So I’m hopeful I’ll be able to achieve.”

With Mishra also vouching for increasing the tax base, Sitharaman said, “On the tax base, we are trying to simplify the returns and simplify the filing procedure so people are attracted towards getting on board.”

Towards the end of her speech, Sitharaman also took on AIMIM MP Imtiaz Jaleel who had raised a report filed by US think tank Freedom House. Sitharaman said that a report which could not get the map of India right should not be referred to. “Don’t take only those reports that are in your favour because Moody’s report too was referred to by our member Kotak ji. He referred to the Freedom report and said you should take cognizance of that too. Only after taking cognizance, the Ministry of External Affairs has given them a pointed reply. But I want the support of the member on one issue. At least tell the Freedom report people to correct the incorrect map of India they put in their report. The think tank that doesn’t make even our map correctly, why are you referring to them? There should be one voice in this house,” Sitharaman said.

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