Tharoor Takes Potshots At Sitharaman One After Another In Lok Sabha On Finance Bill 2025|Full Speech

Summary

The speaker critiques the government's economic policies, highlighting the challenges in growth, unemployment, and poverty. The finance bill is described as a patchwork solution, failing to address deep-rooted issues such as a shrinking manufacturing sector, stagnating exports, and a complex tax system. The speaker also expresses concerns over fiscal mismanagement, including unrealized tax revenue and the departure of wealthy individuals from the country. The focus is on the unequal distribution of resources between states and the lack of a clear, long-term economic strategy to foster growth and prosperity for all citizens. The call for more decisive, inclusive action is emphasized.

Takeaways

• 😀 The Finance Minister's budget speech is criticized for offering superficial solutions, likened to patching up a larger problem without addressing the root causes of India's economic struggles.
• 😀 India's economic growth targets are being scaled back, with growth projections of 6% or more becoming increasingly difficult to achieve due to deep-rooted structural issues.
• 😀 India's agricultural sector remains disproportionately large, while the manufacturing sector has shrunk to historically low levels, creating an imbalance in the economy.
• 😀 Despite tax increases, India continues to struggle with tax collection, as GST remains complicated and difficult for businesses to comply with, particularly for small and medium-sized enterprises (SMEs).
• 😀 Corporate tax collection has increased, but individual taxpayers, mainly from the salaried middle class, continue to shoulder the majority of the tax burden.
• 😀 India has an inefficient and complicated tax system, with one of the highest GST rates in the world (28%), which raises compliance costs and reduces business competitiveness.
• 😀 A significant portion of potential tax revenue remains unrealized due to inefficiencies in tax collection and tax evasion, which hampers fiscal stability and economic growth.
• 😀 Wealthy individuals continue to leave India due to what is perceived as 'tax terrorism,' resulting in the loss of both wealth and potential economic contributions.
• 😀 The government's attempts to raise revenue through disinvestment and the Production Linked Incentive (PLI) scheme have been largely unsuccessful, while relying on the Reserve Bank's dividend is not a sustainable solution.
• 😀 States, particularly southern states like Kerala, face severe imbalances in the distribution of tax revenues, with wealthy states receiving inadequate returns despite contributing significantly to national tax revenue.
• 😀 The Kerala state government has struggled with unfulfilled promises from the central government, particularly in addressing urgent issues such as coastal erosion and wildlife conflict, further adding to the state's financial difficulties.

Q & A

What is the speaker's opinion about the finance bill introduced by the government?

The speaker criticizes the finance bill, describing it as a collection of patchwork solutions rather than a comprehensive plan. They argue that it lacks clarity, conviction, and decisive leadership, and that it is inadequate in addressing the country's deep-rooted economic challenges.

What is the speaker's view on India's tax system, particularly GST?

The speaker expresses dissatisfaction with India's complex and multi-tiered GST system, which they argue increases the compliance burden for businesses. They highlight that GST rates are among the highest in the world, with multiple tax slabs, which makes it difficult for businesses to navigate. The speaker also points out the poor implementation of the system, such as issues with unprocessed applications for businesses and unfair tax rates for traditional products.

How does the speaker feel about the government's management of tax revenue?

The speaker is concerned about the government's inefficiency in collecting tax revenue, citing the large amounts of unrealized tax revenue. They point out that corporate tax collections are low, and GST evasion is rising. The speaker argues that if these unrealized taxes were collected, the government's fiscal deficit could significantly decrease.

What does the speaker suggest regarding India's wealthy individuals and tax policies?

The speaker suggests that India's high-net-worth individuals (HNWIs) are leaving the country due to what they describe as 'tax terrorism.' The speaker calls for a review of tax policies that drive wealthy individuals away, as this negatively impacts long-term revenue generation, wealth creation, and employment opportunities.

What is the speaker's perspective on India's economic inequality?

The speaker highlights the growing economic inequality in India, stating that the top 1% of the population has seen a significant increase in their share of the national income, while the share of the bottom 50% has decreased. This, according to the speaker, indicates that prosperity and growth are benefiting only a small portion of the population, leaving those at the bottom further behind.

What is the speaker's opinion on the government's handling of unemployment and skill development?

The speaker is critical of the government's inability to address the country's high unemployment rate. They highlight the mismatch between the skills of graduates and the requirements of industry, arguing that skill development initiatives have largely failed. This contributes to the rising unemployment rate, despite the need to create millions of jobs in the coming years.

What concerns does the speaker raise about the government's approach to poverty assessment?

The speaker expresses concern that the government is using outdated data to assess poverty in India. They note that the calculation of poverty levels is still based on the 2011 census and does not reflect the current socio-economic reality. The speaker argues for more accurate assessments to ensure that poverty alleviation efforts are effective and target those who need assistance the most.

What does the speaker say about the financial allocation to different states?

The speaker criticizes the financial allocation from the center to states, particularly the southern states, which contribute significantly to national taxes but receive a disproportionately low share. They argue that states like Kerala, Andhra Pradesh, Tamil Nadu, Karnataka, and Telangana are being underfunded despite their vital economic contributions, leading to inequality in the distribution of national revenue.

How does the speaker view the role of the Finance Commission in allocating funds to states?

The speaker criticizes the Finance Commission for its inability to address the concerns of states regarding the allocation of revenue. They argue that once the Commission submits its report, there is no constitutional mechanism for states to challenge or negotiate their share. This leaves states with no recourse for redress, perpetuating the cycle of financial injustice.

What is the speaker's stance on the central government's handling of Kerala's needs?

The speaker highlights that Kerala has been systematically neglected in terms of financial assistance, despite facing numerous challenges. They point to the state's struggles with issues like coastal erosion, wildlife conflicts, and infrastructure projects that remain stalled due to inadequate funding from the central government. The speaker also criticizes the central government for not responding to Kerala's requests for financial aid, which exacerbates the state's financial difficulties.