Finance minister Nirmala Sitharaman tackled criticism over taxation with a firm defense rooted in facts and personal understanding. Speaking on the challenges faced by the middle class, she outlined her government’s efforts to simplify taxes and ensure fairness.
“I wish to do more, but there are limitations,” she was quoted as saying in an interview to Times Now. Sitharaman highlighted the introduction of the new tax regime, designed with lower rates and fewer exemptions to simplify the system.
“Many said they didn’t want exemptions, so we brought in a system with simplified taxation.”
On GST, Sitharaman was unequivocal in defending its impact. “With due respect, GST didn’t bring taxes on essentials. States had their own systems under VAT and excise. What GST did was unify rates, making taxation simpler and one across the country,” she explained.
“It’s difficult to convey this, and I don’t know how I’m going to do this without causing outrage about, you know, ‘how dare the Finance Minister say this?’ But let me be matter-of-fact: Please allow me this indulgence. Was GST tax on essentials brought in only by GST? No. Under the earlier pre-GST regime, every state taxed these items through VAT or excise. ‘Don’t tax’—great principle, great principle, don’t tax at all. But to say it is GST which brought tax on my soap and oil, my comb— with due respect, no.”
“In some states, buying a car was cheaper, and in others, it was more expensive. The GST Council was formed to ensure uniformity, and ministers on the council spend a lot of time understanding this, representing the people.”
Addressing misconceptions, she added, “To think that before GST all these were free whereas now they are taxed—no. I can for sure say after GST, the tax rate on all of them has come down. I’ve released numerous datasets to show that ordinary daily-use items have been brought down in tax. Let’s give credit where it is due.”
Her remarks come as Budget 2025 looms, with demands for tax relief growing louder. India’s economic growth slowed to 5.4% in the July-September quarter, its weakest in nearly two years, while inflation has eroded disposable income. Reports suggest the government is considering reducing income tax rates for individuals earning up to ₹15 lakh annually, potentially benefiting millions of urban taxpayers.
Sitharaman also underscored her personal connection to these issues. “Even I come from a middle-class family that lived on salaries. Do you think I don’t understand these things?” she said.