Accusing Finance Minister Arun Jaitley of giving Rs 2 lakh crore “bonanza” to corporates in the next four years, Congress leader P Chidambaram on Sunday said the NDA government’s first full Budget has failed the fiscal test, the test of equity, and that of rising inequality.

“Budget is very pro-corporate India...You know the cost of this corporate bonanza, in the first year, it is Rs 20,000 crore, in second year Rs 40,000 crore, in third year Rs 60,000 crore and in the fourth year Rs 80,000 crore,” former Finance Minister Chidambaram told Headlines Today in an interview.

After a gap of 10 years, the government had yesterday announced cut in corporate tax by 5 per cent to 25 per cent over four years starting April 2016, but tax exemptions and incentives to the industry will be withdrawn.

Chidambaram, a senior Congress leader said, ”Corporates today pay 23 per cent tax, that is what Finance Minister Arun Jaitley said, it is competitive as best as corporate tax rates in South East Asian countries, so why is 23 per cent effective corporate tax rate is bad?”

“This Rs 2 lakh crore bonanza for corporates in the next four years will translate into incomes for them as salaries, dividend,” the Harvard educated lawyer added.

Chidambaram also said the Budget has failed the fiscal test, the test of equity, and that of rising inequality. Meanwhile, speaking to PTI today, Minister of State for Finance Jayant Sinha said criticism that proposals in the Budget for 2015-16 are pro-corporate and anti-poor, are “completely wrong and ill founded.”

“They (critics) are completely wrong...it is ill founded, misguided and certainly not backed up with any data,” Sinha said.

According to Sinha, the proposed reduction of the corporate tax from 30 per cent to 25 per cent over a period of four years was a “revenue neutral” exercise as the companies were going to lose all exemptions in the process.

He added, the idea behind the move was not to raise taxes but to “remove distortions and inconveniences” and make the taxation system simple and predictable and improve the ease of doing business.

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