Higher interest rates likely for senior citizens

In a move to ensure that the benefits of lower interest rate regime are passed on to the industry without hurting the plight of senior citiz...

In a move to ensure that the benefits of lower interest rate regime are passed on to the industry without hurting the plight of senior citizens, the government said on Tuesday that it was working on a ‘differential’ rates for pensioners, widowers and senior citizens.

According to Finance Minister Jaswant Singh ‘the finance ministry is seriously concerned about the decline in the interest income of senior citizens, widowers and pensioners. I hope to be able to correct it very soon by providing differential rates so that the decline in interest rate does not affect them.’

Replying to supplementaries during the Question Hour in Parliament, Singh said that ‘the government is addressing this issue. At the same time, Singh said the economy had to take into account the international decline in interest rate so that the industry is benefited.’

In reply to another query, Singh said the Kelkar Committee on direct and indirect taxes had only submitted a consultation paper. The paper will be converted into a report after suggestions are received from various quarters and that report will be presented to the finance ministry, Singh said, adding only after this process, the government will consider the recommendations.

In reply to a query on the proposed service tax, Singh said this required a Constitutional amendment and the matter will be put before the Cabinet before introducing the required amendment in Parliament.

Singh said since service tax constituted 48.46 per cent of the GDP, a proposal for introduction of service tax was examined by a committee. The minister said though the service tax will be levied by the Central government, States would, nevertheless, have a role to play after the introduction of the service tax and the issue of their share would also be addressed.

In reply to another query, Singh said at the recently held meeting of State finance ministers, it was decided that centrally-sponsored schemes, which were routed through NGOs, shall now go into the State’s consolidated fund. It would, however, be used for the same purpose for which the funds were allotted.

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In response to a query from Congress leader Manmohan Singh whether the government would consider restoring the minimum size of public holding in a company from 10 per cent to 25 per cent to prevent manipulation in the stock market as a large amount of shares are ‘under play’, Singh said the Sebi took stringent measures to arrest such fluctuations. He said currently in certain cases 25 per cent public holding was allowed.

Singh also said after the introduction of value added tax from April 1, 2003, the service tax will be gradually integrated with VAT. On the issue of dividend tax, Singh said such a tax did not exist at present.