The Hindu : BJP panel for more sops for salaried class

Online edition of India's National Newspaper
Monday, Jan 06, 2003

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BJP panel for more sops for salaried class

By Neena Vyas

NEW DELHI JAN. 5. The Bharatiya Janata Party's Rajnath Singh committee on the Kelkar report favours more concessions for the salaried, middle-class employees in view of the fact that it is perhaps the only class which pays 100 per cent of the taxes due. The committee has also reiterated that there should be no tax on agriculture income.

While welcoming the higher tax exemption limit of Rs. 1 lakh recommended by the Kelkar Committee, the BJP committee would like to see the Government retain the standard deduction for salaried employees as an additional tax benefit, continuation of tax incentives for savings and the tax relief on housing loans.

"The salaried employee pays all his taxes and he cannot claim any expenses unlike the self-employed person and should, therefore, not be treated on par with others. Standard deduction must be retained for this category,'' a member said.

After a meeting of the Rajnath Singh committee today, the party's recommendations are almost ready. When its report is written and discussed again, possibly between January 7 and 9, it will be submitted to the party president, Venkaiah Naidu. "We have been told by the Finance Minister, Jaswant Singh, that the party's sentiments will certainly be kept in mind,'' a member said when asked whether the recommendations are expected to find favour with the Finance Minister.

The party also favours the continuation of tax relief on interest for housing loans up to Rs. 1,50,000 as at present, against the Kelkar recommendation to cut this relief to Rs. 50,000. It is argued that loans on housing are taken for a long period of time and cutting concessions offered last year would adversely affect many. Besides, even a small flat in the city costs Rs. 10 lakhs and upwards. The BJP is happy though with the offer of higher tax exemption limit of Rs. 1.5 lakhs recommended by the Kelkar panel for widows and senior citizens.

There is also the view that while simplification of the excise tax structure was welcome, all commodities should not be treated on par. There was no case, for example, for treating chemicals on par with electronics. "He (Dr. Kelkar) seems to have applied his mind like an accountant, he is looking at the issue purely from the point of view of revenue collection, while, in fact, fiscal policy must have a broad socio-economic objective,'' was a comment from a member of the BJP committee.

The party has also detected a bias in favour of capital markets in the Kelkar recommendations. Instead, the BJP favours the continuation of tax relief on savings. If these savings are not offered, people will be forced to go to the capital markets which have not been stable.

The small investor cannot risk his savings in the capital market, the party committee feels.

Besides Mr. Singh, those who attended the meeting included P. N. Vijay, Arun Sathe, Jagdish Shettigar and Kirit Somaiya.

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