Tax on sari, bread and bun withdrawn

By Our Special Correspondent

THIRUVANANTHAPURAM, JULY 18. The Finance Minister, Mr. K. Sankaranarayanan, announced in the Assembly on Wednesday withdrawal of the revised budget proposal for four per cent sales tax on silk sari and branded bread and bun.

The Minister also withdrew the Fast Track Sales Tax Registration Scheme proposed in the budget to ensure tax compliance.

Replying to the general debate on the budget, he announced a ``token provision'' of Rs. 5 crores for procurement of rubber from the open market.

With these measures, the deficit in the current year's budget climbed to Rs. 467.91 crores from 447.91 crores. The additional expenditure proposed in the budget would increase from Rs. 178.26 crores to Rs. 183.26 crores while the additional resource mobilisation would come down from Rs. 456.40 crores to Rs. 441.40 crores, the Minister said.

Referring to the demands of the traders who observed a hartal today in protest against the budget proposals, the Minister said the Government would discuss their concern about the turnover tax with them. The turnover tax, which had been withdrawn in 1993, had been reintroduced as the coffers were empty. The Government had not considered its withdrawal.

Mr. Sankaranarayanan said that there had been no improvement in the industrial sector during the LDF rule. The present Government proposed to encourage private investment to improve the situation. However, there was no question of weakening the public sector.

He said the expenditure from the MLA's Area Development Fund, proposed in the budget, would be governed by the same conditions as those applicable for expenditure from the MP's Fund. There was no chance of anyone pocketing the funds as expenditure would be subject to government rules.

Earlier, replying to some points raised during the debate, the Revenue Minister, Mr. K.M. Mani, said liabilities of the Housing Board totalled Rs. 1,044 crores. HUDCO had stopped loans to the Board on account of default in repayments by the Board. The Government was trying to solve the matter through discussions with HUDCO.

He added that the Government would go ahead with the housing schemes for the weaker sections whatever be the difficulties. HUDCO had advanced Rs. 712 crores for the Maitri Housing Scheme for weaker sections. This was to be distributed to 3,74,614 applicants. However, the Board spent only Rs. 439 crores during the LDF rule to assist 2,30,814 applicants. The balance was diverted.

The Board had received Rs. 212 crores as annuity deposits from the panchayats for a housing scheme for the poor to be implemented with contributions from the panchayats and voluntary agencies. The interest from the deposits was to be used for making repayments.

However, the Board diverted the deposits. As a result, it was unable to make the repayments now.

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Section  : Southern States
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