The Hindu : Sinha rules out change in tax exemptions on savings

Online edition of India's National Newspaper
Sunday, Mar 17, 2002

National

National

Sinha rules out change in tax exemptions on savings
By Our Special Correspondent

The Union Finance Minister, Yashwant Sinha, at a post-budget meeting with RBI board members in New Delhi on Saturday. To Mr. Sinha's left is the RBI Governor, Bimal Jalan. - Photo: Anu Pushkarna

NEW DELHI, MARCH 16. The Finance Minister, Mr. Yashwant Sinha, today ruled out any change in tax exemptions on savings in the budget even as his own party spokesperson declared that more announcements on these lines are in the offing.

Jubilant over the rollback in LPG prices, the BJP spokesperson, Vijay Kumar Malhotra, told reporters that more rollbacks are in the offing including on levy of surcharge on income and reduction in incentives for savings.

He was evidently concerned about the impact of these measures on the middle class as the party gears up for the Delhi municipal elections.

In sharp contrast, Mr. Sinha who was forced to rollback the prices of LPG today due to political pressures from within the National Democratic Alliance, told presspersons that there was too much hype about the adverse impact on the middle class due to the reduction of exemptions.

He ruled out any further rollback of budget proposals on tax issues.

Mr. Sinha said, after a post-budget meeting of the Reserve Bank of India board, he himself had been a Government employee and felt that the tax exemptions in the budget were not harsh. Only 3.65 lakh people had a taxable income over Rs. 5 lakhs.

As for the economy, he felt it was on the road to recovery and the budget proposals would boost demand and growth. The growing NPAs (non-performing assets) of banks, the depleting food stocks and high transaction costs were the problem areas.

On NPAs, he said that in absolute terms these had risen despite falling in percentage terms. There was also need to build up additional food stocks to ensure food security.

Similarly, he expressed concern over the high transaction costs which were rendering the Indian industry uncompetitive in the global scenario.

On the meeting with RBI board members, he said they had made various suggestions which would be considered and implemented.

Several members had also sent written suggestions to be acted upon in future, including on the implication of the budget and its future direction to the economy.

Mr. Sinha said he was given the opportunity to explain the circumstances under which the budget was prepared.

He was encouraged by the endorsement from the RBI board members about the budget provisions and how these were in the interest of the economy.

Send this article to Friends by E-Mail

National