New Delhi: Finance Minister Arun Jaitley today said the Budget has given Rs 12,000 crore benefits to salaried class and senior citizens and also defended the long-term capital gains tax on equities, saying this government knows how to "bite the bullet." 

Jaitley further said demonetisation and the Goods and Services Tax (GST) will benefit the economy in the medium and long term and the country will again become the fastest growing large economy of the world next fiscal.

Replying to a debate on Budget 2018-19, the minister said that a lot of things have changed since the NDA government took office in May 2014.

"The narratives which we inherited and the narratives which we have now created are entirely different," he said referring to the initiatives taken by the government since 2014.

Observing that India has missed the tag of fastest growing economy by 0.1 per cent, Jaitley said, that as per the IMF, India will again become the fastest growing economy.

Taking a dig at the Congress, Jaitley said during the UPA regime, nobody spoke in terms of the Indian economy being the brightest spot. "It has only happened now," he added.

On impact of demonetisation, he said the growth fell only by 0.4 per cent as against 2 per cent indicated by the Congress.

"We are now seeing personal income tax base increasing, digitisation increasing...," he added.

Jaitley said that in the budget he tried to take care of every section and has given relief to middle class as well as senior citizens.

"The total cost of relief to salaried class is Rs 8,000 crore, to the pensioners and senior citizens it was Rs 4,000 crore. Even in challenging times to give Rs 12,000 crore relief was demanding and yet I have kept the tradition of the last four budgets....," he said.

Talking about the long-term capital gains tax, Jaitley said it would be wrong to attribute crash in stock market to the tax proposal.

Stock market crash is due to global reasons and not because of imposition of LTCG, he said, adding the tax proposal could not have impacted the global markets.

"Whether it is demonetisation, GST, Insolvency and Bankruptcy Code, these are difficult decisions. That is the difference between the UPA and the NDA. We know how to bite a bullet when decisions have to be taken," he added.

Pointing out that there are challenges concerning the agri sector, poverty alleviation and employment generation, Jaitley said the Congress should introspect whether the party during its tenure contributed "in removing these problems or creating these problems".

He also said that there is still a great potential for India to improve its ranking in World Bank's ease of doing business index.

The minister admitted that structural reforms, including GST and demonetisation, have created momentary difficulty, but he said in the long run, they would bring huge dividend to the economy.

The finance minister further said that the government has followed fiscal prudence and would continue to do so in future.

Referring to the GST, he said the government has been able to stabilise its implementation "in a matter of months".

"We have started rationalising the GST rates," he said, adding the effort has been to bring them down with increase in revenue collection.

On the timing of GST implementation, Jaitley said the government could not have postponed it as there was a constitutional deadline.

He said the effective rate of tax on certain items was 31 per cent during the UPA regime, but the Congress now wants the current government to cap taxation at 18 per cent.