Tax, prices of many basic necessities were higher before GST: Nirmala Sitharaman


Union Finance Minister Nirmala Sitharaman said on Tuesday that the prices of many essential items were higher before the introduction of the Goods and Services Tax (GST) under the Narendra Modi government, which “does not deny not the price increase.

But compared to the years of the second term of the Congress-led UPA, the prices of perishables such as vegetables are lower thanks to the joint efforts of the government and the Reserve Bank of India, Sitharaman said while responding to a discussion of rising prices in Rajya. Sabha.

“Many opposition members have said that due to imported inflation and issues with the imported supply chain and global commodity prices, we are being affected. These are realities and we are here to discuss them. No one is denying the price hike,” she said.

“We have made sure that the RBI and the government together take enough measures to ensure that it (inflation) is kept at 7% or less, ideally below 6%. So when we say, look at the world, where some countries have inflation that they haven’t seen in 40 years, that doesn’t mean we’re saying there’s no inflation in that country. said Sitharaman.

Reiterating that the GST changes approved at his 47th council meeting were not opposed by any opposition-governed state, Sitharaman said the tax regime has not increased the burden on families “because that the rates of certain items before the GST were much higher”.

Sitharaman listed tax rates before and after the GST on several items to support her point: hair oil, she said, had a tax of 29.3% before the introduction of the GST, and 18% now. Similarly, she listed toothpaste (29.3% pre-GST to 18% GST now); soap (29.3% to 18%); shoes whose price exceeds Rs 1,000 (21% to 18%); paintings (31.3% to 18%); sugar (6% to 5%); sweets (7% to 5%); washing machine (31.3% to 18%); vacuum cleaner (31.3% to 18%); TVs up to 32 inches (31.3% to 18%); LED lamps (15% to 12%); kerosene pressure lanterns (8% to 5%).

“Families who want to buy things today are buying them at a much lower rate under the GST,” Sitharaman said, responding to a point raised by Trinamool Congressman Derek O’Brien.

She also credited the government with keeping macroeconomic fundamentals strong.

On Monday, in response to the Lok Sabha debate, Sitharaman had quoted former RBI Governor Raghuram Rajan as saying that the central bank had been successful in boosting the country’s foreign exchange reserves and insulating it from the problems faced by countries like Pakistan and Sri Lanka. .

Responding to opposition taunts on Tuesday, she pointed out: “I took everything from former Governor (RBI) Rajan, what he said as an economist. Suppose he gave a political opinion, no, I didn’t take it away.

Sitharaman said that under UPA-2, the average price of various food items per kg such as tomato, onion and potato has reached triple digits. But the focus on these three items as part of the TOP aspect of the Operation Greens program, launched in November 2018, has helped the Center keep its prices at “reasonable levels”.

“In November 2013, the price of onions reached Rs 100 per kg in some centres; the tomato cost 80 rupees per kilo,” Sitharaman said. “It doesn’t matter if I am an onion eater or not. Not just me, the PM also has a concern…. As of May 1, 2009, potato was at Rs 9 per kilo, and in November 2013, it was at Rs 26. And now, in July, it is at Rs 26. We have contained the prices.

“The price per kilo of onion went from Rs 52 in 2009 to Rs 98 in 2013. Tomato was selling at Rs 46 per kilo in 2013 and Rs 34 today.”

Sitharaman rejected accusations that the Center withholds monies earned through various processes instead of sharing them with states. She also claimed that the total flow of funds to states had increased significantly under the GST, as had the average growth in resources.

“Between 2013-2014 to 2023 (budget estimate), Rs 3.77 lakh crore cess was collected (as cess). Rs 3.93 lakh crore was used by states. It goes quickly to the states,” she said, also going on to draw comparisons between the total development expenditure incurred by the Modi government and UPA-I and UPA-2.

“RBI data shows that the total development expenditure incurred by the Modi government, between 2014 and 2022, was Rs 90.9 lakh crore, far higher than reported. In contrast, only Rs 42.9 lakh crore was spent between 2004 and 2014,” she said.


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