The Hindu : CPI(M) flays Kelkar report

Online edition of India's National Newspaper
Monday, Dec 30, 2002

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CPI(M) flays Kelkar report

By Our Special Correspondent

NEW DELHI DEC. 29. The CPI(M) today criticised the Kelkar committee report whose recommendations were aimed at ``rewarding the rich and burdening the middle classes and common people.''

In a statement, the CPI(M) said the committee's proposal to remove most of the tax exemptions was ``iniquitous'' as it sought to equate different types of tax exemptions and give sops to the rich. Exemptions on small savings and house construction loans that encourage investment in the sector are equated with tax exemptions that benefit the rich such as export earnings.

A further evidence of its tilt towards the elite was its recommendations for reduced corporate tax to 30 per cent for domestic companies and withdrawing the tax on dividends.

With tariff on imports proposed to be brought down to 10 per cent in a short span of time, domestic output and revenue collections will be affected. The CPI (M) feared that there would also be revenue loss from the reduced direct taxes and would lead to a decline in the tax-GDP ratio which first began when the economic reforms began.

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