The idea of ​​the tax letter arose between 2 meetings

NEW DELHI: It was during a quick exchange, while moving from one meeting to another in the corridors of the Ministry of Finance, that the chief economic advisor raised the possibility that a fiscal letter would be part of the Budget with the Minister of Finance.

The argument was that while the government He had acted to assure taxpayers, especially companies, that they would not be harassed, the discussion of a confidence deficit simply would not disappear. Doubtful officials were fired and the evaluation was left faceless, but nervousness persisted among taxpayers.

More discussions followed as a search for global examples revealed that very few countries had considered such measures. The idea seemed to gain traction, particularly as the government remained concerned over the need to stamp out the perception of arbitrary action by the tax bureaucracy.

Sitharaman thought about it, but he didn't say much to Sanyal. If the proposal were to reach the Budget, it would be secretly involved. The letter, which the minister said would explain the guarantees to the tax assessors, found the approval of the prime minister Narendra Modi and it became a much discussed element of the Budget.

Live plus Budget discussions, sources said, were on for the past several months. In fact, the process began soon after the first Budget of the Modi 2.0 government was presented. The slowdown in growth, woes of the auto sector, unprecedented rains and damage to crops presented an urgent situation.

While the government came out with major announcements like cuts in corporate tax, a Rs 25,000-crore package for housing and Rs 102 lakh crore for infrastructure projects, work on the Budget continued. The meetings often began at Sitharaman’s office at 10:30am, broke a couple of hours later, and some times officials reconvened in the after noon.

The minister also undertook widespread interactions, in different cities, with sections of consumers, investors, trade and business. The feedback was noted and fed into the discussions. Some demands like GST rate reductions and other “breaks” were predictable. But other suggestions were plus meaningful from the point of view of addressing regulation and credit blockages, holding back growth.

The wealth of details that the ministry evaluated, the sources said, contributed to a budget speech of record duration. The emphasis was to establish that resource commitments were backed by plans and would not continue to be promises. As he made his way through his speech, Sitharaman ignored the suggestions that he drank some water. There were road transport pickups and road minister Nitin Gadkari instead.