Last Update: February 05, 2023, 11:15 IST
In a series of tweets, Chidambaram explained how this could be a savings. (Photo: PTI File)
Chidambaram was referring to a recent interview of the Finance Secretary, in which he had said that housing loans are not savings from a macroeconomic perspective, but “only a push towards something”.
Former Union Finance Minister P Chidambaram on Sunday said that Finance Secretary TV Somanathan should re-examine his theory on housing loans, where the latter had said that housing loans are not savings.
Chidambaram was referring to a recent interview with the Finance Secretary Hindu Wherein he said that a home loan is not a savings from the macro-economic aspect but “just a push towards something”.
In a series of tweets, Chidambaram explained how this could be a savings. “The Finance Secretary asks “Is a home loan a savings?” His answer is ‘no’. I wonder how many people will agree with the Finance Secretary,” he said.
Finance Secretary asks “Is a home loan a savings?” His answer is ‘no’ I wonder how many would agree with the Finance Secretary
– P. Chidambaram (@PChidambaram_IN) February 5, 2023
“Interest payment and loan installment is indeed an expenditure, but it is expenditure which gets converted into an asset, which is a savings,” he said, referring to home loans.
“Suppose you spend the same money on a holiday or on a race course: in the end there will be no wealth,” he wrote.
“The Finance Secretary should re-examine his theory that housing loans are not savings.”
In his interview, the finance secretary talked about the benefits of the new tax regime and disagreed that the old tax regime encouraged savings, saying home loans are not savings.
“If you look at the composition of tax deductions, half of them are for savings and half of them are for non-savings like housing loan or interest on housing loan. Is home loan a savings? So the overall macro economic effect, it’s not going to be a savings boost, but it’s kind of a push towards certain things.
“The government wants you to do housing, insurance or pension. But it may not necessarily encourage savings or affect the savings rate in the country. Hindu.
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