FM hints at more tax reforms

Addressing the BJP national council meeting here on Saturday, Singh said while making the tax system people-oriented, “we will ensure that the rate of growth is not reduced.” Apparently referring to the tax exemption limits, he added, “as and when it is possible, it will be increased.”

He said since the budget has already been passed by Parliament, it was not wise to bring about any “fundamental changes” in its provisions.

He added the government had recently re-examined certain aspects such as the five per cent service tax on life insurance premium, which has since been withdrawn. The Finance Minister dismissed as ‘wrong’ the Congress criticism that his predecessor Yashwant Sinha was shifted from the ministry as he could not handle the economy properly.

Referring to the issue of drought, Singh said the government would ensure within two months that there was no shortage of funds or foodgrains for states affected by drought.

Stating that over-centralisation will not succeed in drought relief, he said while the centre had allotted 50,000 tonnes of foodgrain for drought management, only 30,000 tonnes have been lifted so far.

The finance minister attributed the economic slowdown to bankruptcy of several companies in the United States and the drought situation in the country, but asserted the economy was strong and the Gross Domestic Product (GDP) rate would be among the highest in the world.