India Markets open in 6 hrs 10 mins

Govt moves towards simplifying tax regime; LIC IPO will benefit retail investors: Nirmala Sitharaman

FP Staff

Finance Minister Nirmala Sitharaman said that the Narendra Modi government has taken measures towards simplifying the tax regime and and will take steps so that civil offences are not treated as criminal offences.

"Commencing from corporate tax simplification and reduction, we have shown our intent to move towards a simplified tax regime," she said while talking to reporters in Mumbai.

File image of Finance Minister Nirmala Sitharaman. PIB photo

File image of Finance Minister Nirmala Sitharaman. PIB

The finance minister said that taxpayers' charter, which was announced in the Budget 2020, is based on the idea that taxation regime should be on the foundation of trust among citizens.

Sitharaman said that the government will take steps so that civil offences are not treated as criminal offences.

Talking about the disinvestment of Life Insurance Corporation of India (LIC), she said that the initial public offer (IPO) process will be a transparent one.

"We are looking at an IPO for LIC which will bring retail investors in the picture," the finance minister said.

Sitharman in her Budget speech had said the government intends to raise funds by selling part of its stake in LIC through an IPO.

Sitharaman said that the scrapping of the Dividend Distribution Tax (DDT) would put more money in the hands of the shareholder, particularly the middle-class shareholder. She further said that they would be taxed at the "applicable" tax rate, which would be lower than the 15 to 20 percent tax rate that was earlier charged on the company level.

On the cooperative banks in the wake of the PMC Bank scam, she said that changes in the laws governing cooperative banks would not affect the power of the cooperatives.

Sitharaman said that cooperative banks should be brought under the banking regulation. They must follow the norms which govern any scheduled bank in the country.

The cooperative banks should go to the prudential rules and regulations, if one comes to deposit money in the cooperative bank.

She said that the finance ministry is working on the contentious Financial Resolution and Deposit Insurance (FRDI) Bill but not sure when it will be tabled in the house.

Sitharman's comments assume importance given the massive five-fold hike in deposit insurance and the recent changes in the insolvency laws that included insolvency solutions for financial institutions.

Sitharaman said that the government worked with states and private investors to come up with an infrastructure pipeline consisting of over Rs 6,000 crore of project.

"Government is a facilitator, and will invest in infrastructure creation. There is no intention to play the role of Big Brother," she said.

Earlier in the day, Sitharaman said the Budget presented by her last week provides a "discreet and considered" stimulus, reported PTI.

Speaking to industry representatives in Mumbai, Sitharaman said the Budget draws on experiences of all the past instances of a slowdown in growth where the government has had to provide for a booster.

It can be noted that some constituencies have expressed disappointment with the budget for not having any big announcements, especially at a time when growth has slipped to a decadal low.

"Based on the experiences that we had in the last round of government trying to provide stimulus, We've essentially made sure that we are doing it in a very discreet and considered manner," Sitharaman said at the interaction.

With PTI inputs

Also See: Budget proposals on DDT, personal tax not to impact MF industry: Franklin Templeton Mutual Fund

Insurance watchdog IRDAI says 'yet to get' proposal from LIC on IPO; announcement made during Budget 2020

RBI Governor Shaktikanta Das says govt must continue reforms; green shoots of recovery need to sustain

Read more on Business by Firstpost.