The Hindu : Major crisis looms large over the Capital

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Friday, Mar 14, 2003

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Major crisis looms large over the Capital

By Sujay Mehdudia

NEW DELHI MARCH 13. The question marks over introduction of the Value Added Tax (VAT) regime threaten to snowball into a major crisis for the Sheila Dikshit Government and it is all due to mishandling of the issue and misrepresentation of facts by a set of bureaucrats in the State Finance and Sales Tax Department. The eleventh hour struggle to find a resolution indicates a total lack of direction and failure to foresee such an explosive situation.

With the Delhi Government still dithering and unable to come up with a clear stand on the issue of implementation of VAT, the situation could well turn ugly for the Government and invite the wrath of the traders and the consumers as well. It is understood that many of the major markets have given a bandh call for March 15 to protest the implementation of VAT. Insiders in the Delhi Government feel that the situation, which could have been sorted out at the officers level, now threatens to go out of hand. In fact, it has been left to the Chief Minister, Sheila Dikshit, to do all the basics and ground work, a job which should have been done by officials of the Sales Tax or Finance Departments.

Sources in the Government said the current phase of uncertainty does not augur well for the Delhi Government and instead by now it should have been clear whether or not they are going for the new system or not. They blame the officials in the Sales Tax Department particularly the Sales Tax Commissioner for not coming out with full facts earlier on and only revealing the real crunch situation when the deadline is hardly a month away. "We will keep the interests of Delhi, its traders and most importantly the consumers in mind before deciding anything. I will be meeting the Union Finance Minister, Jaswant Singh, on March 15 and then take a final decision on the issue,'' Ms. Dikshit told The Hindu.

But many in the administration believe that this was bound to happen as the officials dealing with the VAT regime hardly apprised their Finance Minister, Mahinder Singh Saathi, of the true facts. "What can you expect in a situation where the Sales Tax Commissioner does not bother to apprise his own Minister of various issues and avoids interaction with him. What was the Department doing for the past more than one year despite the fact that the meeting of the Empowered Committee of Finance Ministers was held regularly in the Delhi Secretariat,'' asked a senior official.

In fact, sources said it was due to lack of communication which has resulted in such a provocative situation. No effort was made by the Sales Tax Department or the Commissioner to interact with the traders, various associations and chambers. The opinion of the legal fraternity was never sought to get a feedback on the VAT draft. No appraisal was made of the impact the shifting to VAT could have on the price line of major commodities in Delhi. All this should have been done by the Department as it is not the job of the Chief Minister or the Finance Minister to look into such issues. But a set of certain insensitive bureaucrats have goofed up everything for the Congress Government and now they have a situation on hand which needs to be deflated before people including traders take to the streets.

In fact, it is learnt that even the Delhi Cabinet is of the view that VAT should be deferred till the Assembly polls in November. Similarly, the Cabinet sub-committee on VAT had also submitted that VAT should not be implemented as it will disturb the distributive character of Delhi and result in a all around price hike.

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