The Hindu : Saathi may clear stand on VAT during budget speech

Online edition of India's National Newspaper
Tuesday, Mar 25, 2003

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Saathi may clear stand on VAT during budget speech

By Our Staff Reporter

NEW DELHI MARCH 24. Even as the Capital's traders and consumers continue to be on tenterhooks over the proposed new Value Added Tax (VAT) regime, the two leading political parties - the Congress and the BJP -- are busy trying to run each other down with an eye on the Delhi Assembly elections due in November this year.

While the BJP has made it absolutely clear that it would not water down its stand and oppose the introduction of VAT regime at any cost, the Sheila Dikshit Government on its part is keeping all the cards close to its chest.

It is yet to come clear on the issue of implementation of the new taxation system which has become a politically hot issue and has the potential of turning into a big controversy.

However, insiders in the Delhi Government informed The Hindu that the Finance Minister, Mahinder Singh Saathi, is expected to spell out the Government's stand on VAT during his budget speech tomorrow.

Without going into the pros and cons of the issue, Mr.Saathi is expected to make it clear that the Congress Government was not opposed to VAT but would seek time for its implementation. What has been most intriguing is the ambiguity on part of the Sheila Dikshit Government by keeping a veil of secrecy on the issue which could snowball into a major election issue if not handled properly.

So far the Government has tried to put the onus on the Central Government for implementation of VAT without realising that being a State subject it does not have to wait for Central nod to go ahead with new system.

The Congress Government could feel the heat on the issue even if it indicates its willingness to implement VAT and possibly the going would become difficult and too hot to handle.

Sources said the Delhi Government can not escape the responsibility on the issue as it had on a number of occasions committed itself to VAT implementation. Even as the conference of the Chief Ministers in Delhi chaired by the Prime Minister, Atal Behari Vajpayee, the Delhi Government did not protest the introduction of VAT.

Interestingly, the Delhi Secretariat is the headquarters of the Empowered Committee on VAT and during its meetings also, the Delhi Government had not raised its voice of protest giving an indication that it had all along been a willing partner but backed out at the last moment in view of the stand taken by the BJP and protests by traders.

The Chief Minister, Sheila Dikshit, has accused the BJP of double speak and has stated that she would not compromise on the interests of traders and consumers at any cost. But what is most worrying part is that the Congress Government has failed to come clear on the issue.

"The BJP has the potential of creating a confusing situation by opposing VAT and terming the whole thing as anti-trade and anti-consumer. This situation has to be guarded against otherwise the Congress could well find itself cornered,'' a senior party leader remarked.

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