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FM to hold talks with Left on social sector projects

Ahead of the presentation of the Union Budget 2006-07, FM will hold talks with Left parties to fund social projects.

india Updated: Jan 12, 2006 14:07 IST

Ahead of the presentation of the Union Budget 2006-07, Finance Minister P Chidambaram will hold talks with Left parties on their suggestions to mobilise resources to fund ambitious social sector projects like the National Rural Employment Guarantee Scheme.

"I will hold a separate meeting with the Left parties to discuss the suggestions in the note in greater detail. I will give the consideration it obviously deserves," Chidambaram told reporters after the meeting of the Left-UPA Coordination Committee here.

The Left parties, which have been opposing any move to divest profit-making PSUs, have in a note submitted to the UPA government suggested alternate steps to raise resources for funding social sector projects including taxing security transactions and capital inflows and increasing tax rates on luxury goods and services, including cars.

Observing that "effective taxation" of the corporate sector was very low, the parties have also recommended imposition of payroll tax on employers, mopping up of tax arrears, crackdown on tax evasion and recovery of non-performing assets.

In a 13-point note, they have sought taxation of short-term capital gains be raised to 15 per cent to enhance revenue-generation and stabilise hot money flows.

Maintaining that the accumulated cash reserves of 50 central public sector undertakings amounted to over Rs 2.2 lakh crore amounting to about 7.5 per cent of the GDP, the parties pointed out that there was under-investment in the PSUs and sought its reversal in order to reinvigorate these units.

First Published: Jan 12, 2006 14:03 IST