Finally, BJP rejects Kelkar report

The Bharatiya Janata Party BJP has trashed the recommendations of the task force headed by Vijay Kelkar, advisor to FM Jaswant Singh.The R...

The Bharatiya Janata Party BJP has trashed the recommendations of the task force headed by Vijay Kelkar, advisor to FM Jaswant Singh.

The Rajnath Singh committee of the party has opposed the proposals for lifting tax sops on savings and housing loans, rejected the suggestion for levying income tax on agriculture and advocated a continuation of tax benefits available to employees, senior citizens, women, small industries and co-operatives.

BJP president M. Venkaiah Naidu, who submitted the report of the party panel to the FM, said: 8220;I made a simple request to the Finance Minister. There is a need for increasing revenue, as without it, there can be no rise in expenditure. But the interests of vulnerable sections of the society have to be kept in mind. The tax policy should target at economic growth, social justice, employment generation and balanced growth and a judicious allocation of resources.8221;

The committee included MPs Vijay Kumar Malhotra and Kirit Somaiya, national executive members Jagadish Shettigar and Arun Sathe and economic cell convenor P.N. Vijay, among others.

The panel opposed the proposal to withdraw tax incentive on housing loans. The present tax deduction up to Rs 1.5 lakh interest payment on housing loan should continue, 8220;especially at a time when Government targets to build one crore houses during the five years8217; period.8221;

The committee favoured continuation of standard deduction for employees as well as rebates on savings as provided under section 88, 80L and 10 of the Income Tax Act. It disapproved of the proposal for the withdrawal of tax exemptions on education loans now available under section 80E and on medical expenses under section 80DDB.

The party endorsed the proposal to do away with the dividend tax, but opposed the suggestion to remove incentives for SEZs, backward areas and infrastructure development sector. Regarding small industries, it observed, 8220;The BJP is not in agreement to the proposal to reverse duty-free production limit back to Rs 50 lakh.8221; Nor did the party favour the proposal for uniform rates of depreciation under the Income Tax and Companies Act. The party felt that it might weaken the competitive endeavour of the Indian industry in the present globalised era.

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The panel opposed the excise duty hike of Re 1 on kerosene, feeling that it would adversely affect a large number of poor.

The BJP favoured continuing with the weighted deduction for scientific R038;D Under section 35 of Income Tax Act and called for a re-introduction of investment allowance and 100 per cent depreciation for infrastructure sector.