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Economy

Stimulus ‘discreet, considered’, says Sitharaman about budget

Addressing concerns of the industry that opined after the Budget 2020-21 speech that there was no booster dose, Finance Minister Nirmala Sitharaman said today, “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 was in Mumbai today, as she had announced on 4 February she would be as part of her tour of three Indian cities to interact with different players in the economy.

“We kept the macroeconomic fundamentals in mind and made sure that the necessary stimulus which was the demand of the time, both for increasing consumption and also for ensuring investments in long-term asset building as a means to providing stimulus will be taken up,” she added.

Pointing out where the stimulus lies, the minister said that the rural and farm sector had got attention through the 16-point agenda. She said start-ups had got a fillip and infrastructure investments had got her attention too. “The remedy is a considered remedy. I’m sure discerning people will be able to see why it is so,” she said.

A stimulus for banks or a bail-in

The Finance Ministry is working on the much-debated Financial Resolution and Deposit Insurance (FRDI) Bill. Finance Minister Nirmala Sitharaman, sharing this information, said on Friday that work on the bill was going on but it was not yet decided when it would be introduced in Parliament.

The Finance Minister’s statement is significant in view of the five-fold increase in deposit insurance and recent changes in the bankruptcy law. It also includes a bankruptcy solution for financial institutions. Sitharaman said, “We are working on the FRDI Bill, but cannot tell when it will be tabled in Parliament.”

The FRDI Bill will offer a bail-in clause to banks. This many fear will not be in the depositor’s interest. The budget has increased the deposit insurance five-fold to Rs 5 lakh.

The minister welcomed the announcement of liquidity measures by the Reserve Bank for retail customers in general and MSMEs and realty companies in particular. The central bank announced these measures in its sixth bi-monthly monetary review for the current fiscal on Thursday.

There will be a provision under the FRDI Bill in which banks have to first use their resources to recover. Many fear that this bill will harm depositors. Insurance deposited in the budget has been doubled from Rs 1 lakh to Rs 5 lakh.

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Economy

Sitharaman admits govt spending alone won’t revive economy

While the Narendra Modi government has been pumping taxpayers’ money into the market for more than five years now, Finance Minister Nirmala Sitharaman today admitted that the formula of yesteryears’ economist John Maynard Keynes does not always work. She did not name the economist, though.

As the government is constantly making efforts to emerge from the slowdown, the finance minister said that today economic growth cannot be accelerated only by government spending. Sitharaman said that the industry must stop hesitating. There is a need to invest to accelerate the economic growth of the country, she said.

During a post-budget discussion in the Confederation of Indian Industry (CII), the finance minister said that the government would work to make the path of industry easier and all problems would be removed.

“I strongly believe that industry today will have to come out of that hesitation which…you have in your mind, but I think it’s now time to come out of that hesitation. We have done whatever we can, we are not closing the doors; we are still ready to do much more, but I want it to be meaningful intervention from the government rather than rushed,” the minister said.

In a round of discussion on “Assembly in India”, Sitharaman said assembling is for capacity building. “But this does not mean that ‘Make in India’ is no longer our priority,” she said.

Sitharaman said that a group comprising experts in economic affairs, expenditure, revenue, DIPAM, and banking would accompany her in the next few days to three cities, Mumbai, Chennai and Kolkata, to interact with the industry, economists, trade bodies, traders, farmers and farmers’ groups.

The recently presented Economic Survey mentions “Assemble in India for the World”. It suggested that India’s export market share may increase by about 3.5% by 2025 and by 6% by 2030 by linking “Assemble in India for the World” to ‘Make in India’.

The survey said that, by 2025, India would be able to generate about 4 crore jobs with good pay and by 2030 about 8 crore jobs. By 2025, about one-fourth of the money needed to make India a US $ 5 trillion economy will be realised.

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Economy

NRIs to pay tax only on income from India

Union Finance Minister Nirmala Sitharaman presented the budget for the year 2020-21 on Saturday. In the part on income tax, the proposition that NRIs have to pay tax to the Indian government from now on spooked the diaspora. The Ministry of Finance has, therefore, clarified in which cases an NRI will have to pay tax through a statement.

The ministry said through a press release that in the case of an Indian citizen who becomes an honorary citizen of India under this proposed provision, income earned outside India by him will not be taxed in India, unless it is from an Indian business or profession. Necessary explanations will be included in the relevant provision of the law if required.

According to the press release, the new provision is not intended to bring NRIs who work lawfully in other countries under the tax purview. The new provision is being wrongly interpreted, the press release said, to create the kind of image that Indians who are actual labourers in other countries, including the Middle East and who are not liable to tax in these countries, are taxed on that income in India. What they have earned here. This interpretation is not correct.

The Finance Bill 2020 proposes that an Indian citizen shall be treated as resident in India if he is not liable to be taxed in any country or jurisdiction. This is an anti-misuse provision, as it has come to the notice that some NRIs shift their stay in low or tax-free jurisdiction to avoid tax payment in India.

The Narendra Modi government has given a huge relief to taxpayers in the budget 2020-21. Finance Minister Nirmala Sitharaman on Saturday introduced changes in tax slabs while presenting the budget for the financial year 2020-21.

NRIs to pay tax only on income from India

There will be no tax on income up to 2.5 lakh in the new tax system. Income from 2.5 lakh to 5 lakh will be taxed at 5%. Income from 5 to 7.5 lakh will be taxed at 10%. Earlier there was no slab of 10 per cent. 7.5 lakh to 10 lakh income will be taxed at 15%. There will be 20% tax on income from 10 lakh to 12.5 lakh.

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Article Economy

Rich Never Paid 42.74% Tax, They Won’t Even In 2020-21

It is tempting to compare the Narendra Modi government with the Indira Gandhi regime, both being socialist of varying degrees. Given the zeal with which finance ministers since 2014, the late Arun Jaitley, stopgap Piyush Goyal and incumbent Nirmala Sitharaman add cess or surcharge to services, and Prime Minister Modi goes after tax evaders, it takes one back to 1973-74 when income tax and surcharge summed up to 97.75% of one’s income. Whereas Modi regime’s near 43% tax on the super-rich is far below Indira-level socialism, the two scenarios are analogous as, in both these periods, economists are lamenting the lack of private sector investment, which makes the government pump public money into the economy following JM Keynes’ prescription. While the eras of Jawaharlal Nehru and Indira Gandhi were associated with the “Hindu rate of growth” (2%-3%), Modi’s regime for the past few quarters have drawn close to it with the growth once going down to as much as 4.5%. If the businessmen, as well as the youth from families that could afford it, fled abroad during the Indira years and the only jobs the university graduates could think of were government jobs, once again there is a hue and cry over ‘unemployment’, may not be because there are no jobs but because the young of 2019-20 are strangely asking for public sector jobs as if they were products of the pre-1980s.

This perception that Modi is Indira reincarnated peaked during the budget of 2019-20 when Sitharaman announced an additional percentage of super-rich tax with aplomb. The 2% additional surcharge in 2015-16 had moved it up from 10% to 12% for those who earned more than Rs 1 crore per annum. This became 15% in the next fiscal that also had a 10% tax on income from dividend if that was more than Rs 10 lakh a year. Even this was not all that a rich citizen paid. Companies by then had already paid 15% tax on shareholders’ dividends. The situation seemed to have aggravated during the last budget when Sitharaman made those with a taxable income of Rs 2 crore to Rs 5 crore pay a surcharge of 25% and those earning more than Rs 5 crore pay 37% extra. But did these rich Indians actually ever pay 39% and 42.74% tax ever? No, they didn’t. How they worked around it follows.

Most known rich people do not draw high salaries. Instead, they earn much of what they do from dividends on the shares they hold. Their companies paid, including the 12% surcharge and the 4% cess for health and education, just 20.56% of tax. Then, the promoter of the company, with an annual income of more than Rs 5 crore, himself paid 34.8% of tax, which was a sum of 10% on dividend, 37% of that as surcharge and 4% cess on the sum of the first two.

Nevertheless, all hell broke loose after the previous budget, with Sitharaman being branded as a JNU-brand communist since her educational background was by then widely known. Nobel Laureate leftist economist Abhijit Banerjee saying in an interview that his views and those of Sitharaman nearly matched during their years in the said university.

While Sitharaman called a series of press conferences post Budget 2019-20 to roll back the policy measures announced in her July speech and go as market-friendly as bringing India’s corporate tax down to the level of the best ASEAN countries, the perception stuck. She refused to work on a facelift this 1 February even when she struck off the dividend distribution tax (DDT). Now the super-rich will pay 42.74% tax, the highest marginal rate, as the government will tax the dividend wholly from the recipient at a rate that is applicable. This is a sum of 30% of his income from the slab for the super-rich, a 37% surcharge on this 30% (= 11.1%) and a 4% cess on the sum of the first two (= 1.64%). So, will the magnates and tycoons now pay 42.74% of what they earn back to the state? Not quite.

They may now come up with bonus issues and stop declaring dividends. That is how the companies will reward all shareholders, the largest of whom are the directors.

Even this will stand relaxed when the government comes up with the taxpayers’ charter that Sitharaman promised in her budget speech. It is expected also to put the zealots among officials in the tax department on a leash.

But this may not be enough to clear the perception that Modi is anti-wealth creation, no matter how much he waxes eloquent about the need to appreciate these people. It is not merely the amount the rich need to shell out that bothers them. It is the variety of taxes they need to pay that gives the taxman excuses to harass them, to escape which they seek the help of chartered accountants so that the calculations are all correct.

Besides, giving away a big chunk of one’s money makes the rich look for undeclared earnings from tax havens overseas. It’s a provocation for black money. And when Indian money goes to a tax haven abroad, it is not just the tax that India misses out on. It is also the business that money has been put into, which, in turn, means Indians do not get the jobs those businesses create. Information about just a percentage of such tax evaders from just one of many destinations, Switzerland, coming to the notice of the authority after six years of Modi rule indicates it is not easy to chase the money India has once lost. And the Indian authority not revealing the names of the tax evaders suggests it will affect India’s own case as their resources are well-entrenched in this country too.

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Article Economy

New Income Tax Regime Good For Real Middle Class

Announcing the new tax slabs, Finance Minister Nirmala Sitharaman said that this arrangement would be optional. That is, if a person wants to pay tax according to the old tax slab, he can continue to do so! So, what’s the brouhaha all about? Until you know how to handle the new slabs, continue filing your returns the old way.

In the old system, taxpayers got many discounts and concessions while paying taxes. Sitharaman said if a taxpayer wanted to take advantage of this system, he will have to waive around 70 concessions and exemptions out of 100. This may look like a meaningless exercise, but the finance minister claimed that the new slabs were meant to make the tax system “simple” and “easy”.

A person will have to take help of a tax expert to understand the gain or loss arising out of leaving deductions and exemptions in the new system. No person would want to give up the benefit of the exemption available in the old system.

Who does not take advantage of the exemption available under 80C? The old system had a standard deduction of up to Rs 50,000, LTA, interest on a home loan and a rebate of up to Rs 50,000 on interest income to senior citizens. One will have to forgo these concessions to take advantage of the new tax regime.

At the time of tax filing, the rebate of up to Rs 2 lakh on the interest paid on home loans with LTA, HRA is a huge amount, which is not included in the new arrangement with other exemptions and deductions.

Whether the new I-T system is of any use to you depends on your income and your investment and you cannot calculate it yourself without the help of a tax expert. To avail of the new tax regime, taxpayers will have to waive these exemptions. These are the exemptions that almost every salaried employee uses at the time of filing taxes.

  1. Leave Travel Allowance (LTA)
  2. House Rent Allowance ie HRA
  3. Standard deduction up to Rs 50,000
  4. Exemption of Rs. 15,000 in respect of family pension and
  5. 80C, which includes PF contribution, LIC premium, school tuition fees, ELSS, NPS and PPF investment

Many other exemptions will have to be waived while paying taxes under the new tax regime.

After the corporate tax was reduced to 22%, people asked whether the corporate sector would now pay less tax than the normal taxpayer. The government has made such an arrangement to avoid this criticism. But bureaucrats have to understand that there is a big difference in the tax composition of common taxpayers and corporate taxpayers.

Under the old system, no tax had to be paid on annual income up to Rs 2.5 lakh while there was a 5% tax on an annual income of Rs 2.5-5 lakh. The rate was 20% on Rs 10-20 lakh while those earning Rs 20 lakh to Rs 2 crore annually had to pay a 30% tax. A person earning more than Rs 2 crore had to pay 35% tax.

How to save under new tax regime

You may not invest in PPF, LIC, insurance, tax-saving ELSS mutual funds, etc and yet save taxes. Let’s first check what all concessions you need to forgo to make a switch (you don’t have to switch, I repeat).

So far, deductions were available under Section 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, etc. If you wish to switch to the new slabs, don’t claim tax relief for investments under PPF, LIC, insurance, tax-saving ELSS mutual funds, etc.

So far, there used to be a standard deduction, deduction for entertainment allowance and employment, professional tax. There was a house rent allowance. In other words, you could show a certain amount of your income as your expenditure on house rent and thus be spared paying tax on that amount. You got a leave travel concession or leave travel allowance (LTA). You got some allowances according to Clause 14 of Section 10.

MPs and MLAs got allowances as per Clause 17 of Section 10. There was an allowance for the income of a minor according to Clause 32 of Section 10. There was an exemption for an SEZ unit in Section 10AA. Interest under Section 24 in respect of self-occupied or vacant property referred to in Sub-Section (2) of Section 23.

One could claim an additional deprecation under Clause iia of Sub-Section 1 of Section 32. There were deductions under Section 32AD, 33AB and 33ABA. There were deductions for donation for or expenditure on scientific research contained in Sub-Clause ii or Sub-Clause iii of Sub-Section 1 or Sub-Section 2AA of Section 35. Then there was a deduction under Section 35AD or Section 35CCC. Finally, you could avail of the deduction from family pension under Clause iia of Section 57.

Now, for years, economists have opined, and rightly so, this made India’s income tax system one of the most complex and complicated in the world, no matter how much you enjoyed it when your CA taught you tricks to escape high taxation.

Calculate how much you save since you are paying your income tax at a much lower rate. Under the new system, taxpayers with income up to Rs 5 lakh will no longer have to pay any tax. A 10% tax on an annual income of Rs 5 to 7.5 lakh, 15% on the income of Rs 7.5 lakh to Rs 10 lakh, 20% on the annual income of Rs 10 lakh to Rs 12.5 lakh, 25% on an annual income of Rs 12.5 to 15 lakh and 30% tax if you earn more than Rs 15 lakh.

A person with an annual income of Rs 15 lakh had to pay Rs 2,73,000 of I-T earlier. Now he pays a much lower Rs 1,95,000. That’s a saving of Rs 78,000.

However, those with incomes higher than Rs 20 lakh will find the old system with exemptions a better option.

Remember, the NPS under Section 80CCD(2) continues even if you switch. Your employer must offer the option.

If you are an employer yourself, your contribution of up to 10% of the employee’s salary (basic + DA) is still eligible for tax relief under Section 80CCD(2).

The new regime is good for those who have just started their careers and are not likely to have taken loans already. This budget is meant to be good for the middle class, not the rich who are fancifully called the “upper middle class”. Look at it in the light of the big saving for people earning up to Rs 15 lakh a year.

If your investments are subjected to Section 80C alone, you end up saving Rs 14,820 if you earn up to Rs 15 lakh a year.

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Economy

Union Budget 2020-21 Live

Union Finance Minister Nirmala Sitharaman has concluded reading the document of Union Budget 2020-21 proposals. Sirf News‘ live blogging has ended.

The tweets posted after 1:50 PM below are of verified accounts still using the hashtag #Budget2020.

Finance Minister Nirmala Sitharaman and Minister of State for Finance Anurag Thakur have reached Parliament House. The Modi Cabinet meeting has started in Parliament House. The Union Budget 2020-21 will be approved by the cabinet, after which the budget will be presented in the Lok Sabha at 11 AM. Budget copies have reached Parliament House.

Sitharaman is the first woman finance minister, who has full charge of the finance ministry. She will present her second budget today.

Before the budget is presented, officials and ministers have started arriving in the Parliament House. Union Minister Jitendra Singh, Prakash Javadekar, Cabinet Secretary Rajiv Gauba have reached Parliament House.

Prime Minister Narendra Modi has reached Parliament House as well. There is to be a meeting of the Modi cabinet sometime from now, in which the Union Budget will be approved. Today, the world is eyeing this budget coming amidst the staggering economy.

Like every time the Finance Minister met the President before presenting the budget in the Lok Sabha. Finance Minister Nirmala Sitharaman, Minister of State for Finance Anurag Thakur met President Ram Nath Kovind on Saturday morning. The budget has been approved by the President and now the budget will be passed in the Union Cabinet.

The Prime Minister Narendra Modi-set target of Indian economy turning as voluminous as $ 5 trillion by 2024 is near-impossible to meet, suggests this year’s Economic Survey. Economists believe that to reach this goal, the GDP growth rate should be 8% per annum. But in the first year of chasing this goal set by the prime minister, the GDP grew at around 5% or a notch below that level. This will more or less remain the rate of growth next year. The Modi government itself believes that the GDP growth rate will be 6-6.5%.

India in 2018 was expected to grow at a break-neck speed in 2019, but that did not happen.

The government has presented the Economic Survey for the year 2019-2020 in the parliament. This survey report states that the GDP growth rate will be 6-6.5% in the financial year 2020-21. That is, the Indian economy is lagging in the speed of about 1.5% to meet the target of $ 5 trillion by 2024.

If the GDP growth rate is 6-6.5% in FY 2020-21, it is projected to attain a pace of above 8% in three years to turn Indian into a $ 5 trillion economy. The data of the Economic Survey before Budget 2020 has given a shock to the government on the GDP growth front.

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Economy

Economic Survey: Meeting Modi deadline for $ 5 T impossible

The Prime Minister Narendra Modi-set target of Indian economy turning as voluminous as $ 5 trillion by 2024 is near-impossible to meet, suggests this year’s Economic Survey. Economists believe that to reach this goal, the GDP growth rate should be 8% per annum. But in the first year of chasing this goal set by the prime minister, the GDP grew at around 5% or a notch below that level. This will more or less remain the rate of growth next year. The Modi government itself believes that the GDP growth rate will be 6-6.5%.

India in 2018 was expected to grow at a break-neck speed in 2019, but that did not happen.

The government has presented the Economic Survey for the year 2019-2020 in the parliament. This survey report states that the GDP growth rate will be 6-6.5% in the financial year 2020-21. That is, the Indian economy is lagging in the speed of about 1.5% to meet the target of $ 5 trillion by 2024.

If the GDP growth rate is 6-6.5% in FY 2020-21, it is projected to attain a pace of above 8% in three years to turn Indian into a $ 5 trillion economy. The data of the Economic Survey before Budget 2020 has given a shock to the government on the GDP growth front.

When the Modi government came to power again last year, it announced in the annual pre-budget exercise of Economic Survey before the budget in July 2019 that the Indian economy would be as big as $ 5 trillion by 2024. It was estimated that by 2024, at least 8% GDP growth rate would be needed to achieve this goal. But the government itself had its projected growth of the GDP as 5% in the current financial year (2019-20). It is now estimated to be 6-6.5% for 2020-2021.

On 1 February, Finance Minister Nirmala Sitharaman will present the annual budget of the union in the parliament for 2020-21. Prior to the budget, Prime Minister Modi was seen active on the economic front. He held meetings with several big industrialists and economists continuously this month. The issue of achieving the target of being a $ 5 trillion economy figured in the meetings.

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Business

Modi: Action against corrupt doesn’t mean govt is anti-business

Prime Minister Narendra Modi met 10 top businessmen of the country on Monday ahead of the Union Budget. The prime minister discussed with these businessmen issues before the economy and measures to promote growth and create jobs. Sources said the meeting was held in the Prime Minister’s Office later in the afternoon.

Modi patiently heard out Reliance Industries chairman Mukesh Ambani, chairman of Bharti Enterprises Sunil Mittal, chairman of Mahindra & Mahindra Anand Mahindra, former chairman of Tata Sons Ratan Tata, Tata group chairman N Chandrasekharan, Adani group chairman Gautam Adani, TVS chairman Venu Srinivasan, Vedanta chairman Anil Aggarwal and L&T chairman AM Naik.

Finance Minister Nirmala Sitharaman will present her second Union Budget 2020-21 on 1 February. In the budget, everyone will keep an eye on the measures to boost the growth rate.

On this occasion, the prime minister said that the goal to be an economy worth $ 5 trillion is just one stop of this decade. “Our goals are greater,” he said, adding, “IBC (the Insolvency and Bankruptcy Code) is a law to save the future of honest entrepreneurs and this has ended the inspector raj.”

The prime minister said, “Both workers and industrialists will benefit from the proposed Labour Code. To say that the government is against the industrialists because it takes action against some unscrupulous and corrupt people is propaganda.”

Modi said, ‘It is not right to underestimate the potential of Indian entrepreneurs. ‘Zero Effect, Zero Defect’ will have to be the mantra of production and only then our exports can increase.”

On the success of digital payment, Modi said, “In FY 2018-19, there was a transaction of about Rs 9 lakh crore from UPI and in this financial year till December this figure is Rs 15 lakh crore.”

The central government has taken several measures to overcome the slowdown in the economy, Modi said. On September 2019, he reminded the industrialists, the government had announced a big reduction in the corporate tax from 30% to 22%, which is roughly the average corporate tax charged in ASEAN countries. Further, the government announced a reduction in the tax for manufacturing companies to 15% to attract new foreign direct investment (FDI).

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India

Pejawar seer Vishwesha Tirtha Swami: Last journey

Thousands of people, including Union Finance Minister Nirmala Sitharaman, paid their last tributes to seer Vishwesha Tirtha Swami, head of the Pejawar Math, at the National College ground here. The finance minister is a Rajya Sabha member from Karnataka.

Karnataka Chief Minister BS Yediyurappa, former Chief Minister Siddaramaiah, Deputy Chief Minister Govind Karjol and Karnataka Revenue Minister R Ashoka also paid tributes to the Pejawar swami.

The head of the Pejawar Math located in Udupi, Karnataka, Sri Vishwesha Tirtha Swami, had left this world on in the morning of Sunday. Sources in the monastery said that he had been running ill for some time. The swami’s body was brought in by a special helicopter to the National College ground in Bengaluru. He had addressed the people from here many times. His body was placed on a platform.

Holy men of several prominent monasteries including Shivarathri Deshikendra Mahaswami of Suttur Math in the state and Charukirti Bhattarak Swami of Shravanabelagola Jain Math paid their last respects.

The Pejawar seer’s last rites were performed at the Poorna Prajna Vidyapeetha, which was founded by Sri Vishwesha Tirtha Swami. Extensive security arrangements had been made in the National College in view of a large number of people gathering for the tribute.

Sri Vishwesha Tirtha Swami of Pejawar Math was a Hindu saint who devoted his entire life to the propagation of Hinduism, presenting himself as a liberal face of the faith. He had a deep faith in Hinduist religious works like cow protection. He had played an active role in the Ram Janmabhoomi movement. He also organised Iftar for Muslims during Ramadan until recently at the Sri Krishna Math complex of Udupi.

Pejawar Sri Vishwesha Tirtha Swami

Swami ji, who had been ill for some time, died at the age of 88. He was socially active. Along with his spiritual activities, he reached out to Dalits in their colonies for social harmony. Due to his inclusive approach, he became the darling of thousands of devotees in his life of eight decades. He was closely associated with the Vishwa Hindu Parishad. The top leadership of the BJP including the late Atal Bihari Vajpayee, LK Advani and Prime Minister Narendra Modi used to respect him very much.

BJP leader and former Union Minister Uma Bharti took dīksha from the Pejawar Swami in 1992. His junior Vishwaprasanna Tirtha is likely to succeed him at the math.

Categories
Economy

Onion prices going down, says Sitharaman; Tomar blames inflated estimates from States

Union Finance Minister Nirmala Sitharaman said on Friday that a decline in the onion prices has begun. She said that the price has not come down as much as it should but is definitely decreasing.

At a press conference held to inform the press about the measures taken by the government to speed up the economy, Sitharaman said that a group of ministers was reviewing onion prices every one or two days. She added that the ministers are now also deliberating upon ways to address issues related to imports.

The finance minister said, “Onion is a fast rotting item. In some places, the crop production went down due to rains and floods, due to which the supply decreased. It went below a reasonable level. The government is taking steps to increase imports and is taking measures to get onions to the market as soon as possible.”

According to sources in the consumer ministry, imported onions will start coming to the market after 15 December. The arrival of the new crop from Maharashtra and Gujarat will accelerate.

Apart from this, the Union government’s decision to import 30,000 metric tonnes of onions through MMTC will be implemented on 27 December.

According to a government official, the rise in the prices will stop mid-December. It is expected that prices of the bulb vegetable will come down by December because then the difference between the demand and supply of onion will be negligible.

Agriculture Minister Narendra Singh Tomar in the Lok Sabha attributed the reason for the increase in prices of onion to the decrease in its production. He said after the price increased, its export was banned and an import was ordered.

Chief ministers of all States have also been asked to take steps to control onion prices. When opposition leaders asked Tomar if he ate onions, the minister said, “I do eat onions.”

Tomar acknowledged that onion was a burning issue in the country these days. “People are suffering. We are aware of this. The yield has been lower than the estimate given by the States on the production of onion.”

A recent article on Sirf News had explained the reason for higher prices of food items including onion, said that it was good for the economy, and predicted that the inflation in this sector would lower with a better rabi crop in the next six months: