The Hindu : BJP recommends rollback of harsh budget proposals

Online edition of India's National Newspaper
Sunday, Apr 14, 2002

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BJP recommends rollback of harsh budget proposals

By Neena Vyas

The Prime Minister, Atal Behari Vajpayee, the BJP president, Jana Krishnamurthi, and the Union Home Minister, L.K. Advani, at the BJP national executive meeting at Panaji on Saturday. — PTI

PANAJI (GOA) APRIL 13. The Bharatiya Janata Party has suggested several amendments to the Finance Bill putting pressure on the Union Finance Minister, Yashwant Sinha, to reconsider his tax proposals that have particularly hit the middle class alienating it from the party, as particularly evident from the party's rout in the recent Delhi Municipal Corporation elections.

In a resolution adopted today, the BJP national executive committee said that when people were expected to tighten their belts and accept higher tax burdens, the Government should "set an example'' by adopting "visible'' austerity measures.

Mr. Sinha has not denied that he may be "rolling back'' some taxes announced by him while pointing out that changes and amendments at the time of adoption of any Finance Bill were "routine'' and that every Finance Minister had to be responsive to suggestions and criticisms.

`Restore tax rebate'

Restoration of the 20 per cent tax rebate on savings under Section 88 of the Income-tax Act for those with incomes up to Rs 5 lakhs has been suggested strongly by the party. The strong opposition to any cut in the rate of interest in the employees provident fund by the Labour Minister, Sharad Yadav, is seen by the party here as a response to the BJP's anger and disappointment with a budget that has taken away the party's middle class voter, once its backbone in urban areas.

If Mr. Sinha escaped harsh open criticism by BJP members at the executive, it was partly because the party president, Jana Krishnamurthi, had himself said in his opening remarks that managing the economy and political management must go hand-in-hand.

It is obvious that the party is now extremely worried about its middle class voters — elections are now on the cards in Gujarat and Jammu and Kashmir — as before the Budget presentation the party leaders did meet Mr. Sinha to give their suggestions, but to no effect. The string of electoral defeats cannot but force Mr. Sinha to reconsider some of the proposals considered by the party as harsh or at least politically unwise.

Several concrete suggestions were made in the five-page economic resolution: pension scheme for individuals; a monthly income scheme with higher interest rates for senior citizens; a direct fertilizer subsidy to farmers; flexible PDS system to allow the daily purchase of foodgrain by the poorest families; and a ''gradual'' phasing out of subsidy on LPG and kerosene over three to five years to end the administered prices regime in the petroleum sector.

The party also suggested modification of the crop insurance scheme to give easy access to farmers. Finally, it suggested "tough measures'' for tax recoveries and keeping the non-performing assets down in the banking sector to mobilise more resources instead of increasing the tax burden on the middle class.

Specifically for Goa and this would benefit all coastal areas), the BJP suggested the restoration of the diesel susbsidy for fishermen which was removed in the budget proposals.

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