NIRMALA SITHARAMAN, FINANCE MINISTER: 'Efficient spending is paying dividends'

After presenting the Union Budget, finance minister Nirmala Sitharaman interacted with mediapersons and highlighted the government’s resolve to make the exemptionless new regime an attractive option for taxpayers. She also discussed the steep hike in capex, inflation concerns and the goal to make India a 5-trillion economy, among others. Edited excerpts:

Does the increase in the income tax rebate limit to ₹7 lakh under the new regime mean the end of exemptions/ various incentives for investments and savings?

We want to make the new tax regime, which is without exemptions, attractive enough for people to think that this will be the best option for them because it gives them better rates. It also doesn't make the compliance a burdensome exercise. The rates can be so low that one benefits by paying lesser tax, and those exemptions that they could've otherwise gained from would've probably resulted in the net amount being the same. However, if there are people who think that being under the old exemption regime benefits them, they are welcome to continue with the same.

What percentage taxpayers moved to the of new tax regime in the last assessment year?

For companies, over 60% of our corporate tax is coming from the exemption free tax regime. We are hopeful that this scheme for individual taxpayers will ensure that the majority shift to the new regime.

What was the need to lower the effective tax rate for high-income groups?

Tax rates in our country were amongst the highest, even more than in some developed countries. They were introduced as interim measures, and that has now been reduced so that the highest effective tax rate becomes 39%. The move is towards lower rates but fewer avoidance measures and exemptions.

There is a big gamble in terms of capex hike. Will this will trigger job creation?