P Chidambaram on Housing Loan: Questioning the statement of Finance Secretary TV Somanathan on domestic debt, former Finance Minister and Congress leader P Chidambaram has advised him to re-examine his theory. Chidambaram has made a series of tweets regarding an interview of the Finance Secretary. Chidambaram wrote, “The Finance Secretary was asked the question whether housing is saving people? His answer was- No. I wonder how many people would agree with the Finance Secretary.”
Recently the Finance Secretary gave an interview to The Hindu. In this, the Finance Secretary had said that from the macro-economic point of view, housing loan is not a savings, rather it is just a push towards some things. Regarding this answer of the Finance Secretary, P Chidambaram advised him to correct his theory.
Chidambaram explained housing loan
The former finance minister made his point in several tweets in which he gave his arguments to prove housing loan as a savings. In another tweet, Chidambaram told that the installments and payments made during the housing loan are part of the expenditure. But this expenditure later becomes an asset (house), and thus becomes a savings.
The Finance Secretary asks “Is the housing loan a saving?” His answer is ‘No’
I wonder how many people will agree with the Finance Secretary
— P. Chidambaram (@PChidambaram_IN) February 5, 2023
Strengthening his point, Chidambaram further argued that suppose you spend the same money on a holiday or a race course. In the end (you) will have no wealth. The Finance Secretary should re-examine his theory that housing loan is not saving.
What did the Finance Secretary say?
Finance Secretary Somanathan was talking about the beneficial difference between the new and old tax regimes. During this, he told how housing loan is not a part of savings. Somanathan disagreed that the old tax system encouraged savings.
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