Budget may go by Kelkar report on indirect taxes
FM may also implement Rajnath Singh committee's suggestions on direct taxes in the Budget.business Updated: Feb 27, 2003 16:21 IST
Raising Income Tax exemption limit to Rs 70,000-80,000 and retaining standard deduction along with tax sops for small savings and housing loans, the Budget 2003-04 to be presented on February 28, is expected to carry out a "clean up" operation of tax administration besides measures to spur growth.
The maiden Budget to be presented by Finance Minister Jaswant Singh in Parliament is likely to carry out the roadmap laid out by Kelkar on indirect taxes and implement the suggestions of Rajnath Committee on direct taxes, which has dumped some of the proposals made by Kelkar, official sources told PTI.
The Budget, widely expected to carry forward reforms to widen the tax base, is also expected to make an attempt to control expenditure by cutting unmerited subsidies and lowering interest rates on small savings to contain whopping fiscal deficit, that is crowding out investment.
The pre-budget Economic Survey has given clear signals in this direction by asserting "there is an imperative need to address the three issues of infrastructure, regulatory and tax reforms and fiscal consolidation to establish the foundations of robust eight per cent growth on a sustained basis."
The sources said though the Finance Minister is likely to indulge in some populism in the face of stiff resistance from BJP to Kelkar panel recommendations, the Budget may contain measures that would ensure that the revenue loss that may occur was more than made up by widening service tax base. Service tax collections target be doubled next fiscal from this year's figure of Rs 6,250 crore.
First Published: Feb 27, 2003 16:15 IST