Calling the Union Budget a “disaster for the common people”, Amit Mitra, the Principal Chief advisor to West Bengal Chief minister, on Saturday alleged that there may be a “deep-rooted conspiracy” with the government allowing 100 per cent Foreign Direct Investment (FDI) in insurance but not cutting GST rates on insurance premiums.
Finance Minister Nirmala Sitharaman, in her Budget speech, announced a hike in the FDI limit from 74 percent to 100 per cent. This enhanced limit will only apply to companies that invest the entire premium within India.
‘Challenge to PSUs’
“Hundred per cent FDI is allowed in insurance. What does that mean? It is a challenge to all the public sector companies like LIC and a host of other insurance companies. Our State asks for GST on insurance, including life insurance, to be reduced from 18 per cent to 0, because it is only punishing people who are taking insurance. The Central government did not allow it. It postponed the matter. That leads me to the question. Is there some kind of a conspiratorial process here that foreign direct investors come in with 100 per cent equity, but the GST remains at 18 per cent for insurance for the common people? Who benefits from this?” wondered Mitra.
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“Inviting 100 per cent FDI in insurance, but not cutting the GST rate on insurance. Does it have a connection between the two? In this government between somebody or the other, an international lobby? We need to think about that,” said Mitra, a former Finance Minister of West Bengal.
Unemployment persists
He alleged that there was nothing for the youth, women and farmers in the Budget, which did not address the unemployment issue. “Youth unemployment today is 46 per cent. Among them, 30 per cent are unemployed who are graduates. According to CMIE, as much as 37 million people were unemployed between October and December (2024),” Mitra said.
According to him, the common people will not benefit from the revised income tax slabs as there is nothing in the Budget to rein in high inflation.
“Taxes from the 7 lakh threshold have been raised to 12 lakh. So the (people earning) income of 12 lakh level will not pay taxes, but remember inflation is rising and there is nothing in the Budget to control inflation,” he said.
““It (Union Budget) has cut everything. Social services (funds) were cut by 16 per cent. Housing cut by 4.38 per cent…Now, what is interesting is that even the food subsidy has been cut by 1 per cent,” Mitra added.
