PM spikes harsh measures, Rs 4,700-cr rollback on the cards

jayanthi iyengar new delhi: a rs 4,700 crore rollback of budget proposals seems to be on the anvil with prime minister atal bihari vajpayee ruling in favour of not only appeasing the bjp national executive, but also the industry. though the exact details of the rollback would be clear only when the amendments to the finance bill 2002 are moved in parliament on april 26, feedback coming from the finance ministry indicates that on monday, finance minister yashwant sinha would not only restore the tax rebates on savings instruments under section 88 and withdraw the service tax on insurance companies, but also move amendments for restoring the 10 per cent tax on distributed profits in the hands of the corporate, instead of taxing dividend income in the hands of the investors at their marginal tax rate. according to finance ministry sources, sinha, accompanied by his battery of officials, had presented several alternatives to the prime minister on wednesday morning. most of these alternatives outlined by the revenue department officials were aimed at reducing hardships to the public through the changes made by the finance bill 2002, but the prime minister is learnt to have shot down most of these suggestions as halfway measures. instead, he opted for going the whole hog, making â€œspecific suggestions of his own,â€�sources present at the meeting said. these sources also said that the revenue department had made a strong case for the retention of the proposed tax measureswith some modifications, but the prime minister wanted â€œto go beyond even what had been recommended by the party (bjp) leadership,â€� these sources said. meanwhile, the finance ministry reiterated yet again that the concessions extended on monday to the retired government, public and private sector employees would be available to them â€œwithout any limitâ€�. two days ago, the ministry had extended the benefits promised to retiring government, private and public sector employees under â€œ8 per cent relief bond 2002â€� to all pensioners. as a result, all retiring/retired employees, including those in the private sector, are now permitted to invest/reinvest their terminal benefits in the tax-free relief bonds. the ministry clarified to et again on wednesday that the entire terminal benefits of the retiring and retired government and non government employees could be invested in the goi relief bonds â€œwithout any monetary ceiling.â€� though the ministry had announced the change on monday, the 70-odd bjp mps who met the prime minister on tuesday failed to take note of the changes already made to accommodate the interests of the pensioners. instead, they demanded total or partial withdrawal of the â€œunpopular measuresâ€�including the slashing of the section 88 rebate, restoration in subsidies on urea and lpg, removal of telephones from the one-by-six criteria and safeguarding the interests of the pensioners. though a rollback in dividend tax has not been sought by the bjp party leadership, sources say that there has been severe behind the scene lobbying for its rollback.

PM spikes harsh measures, Rs 4,700-cr rollback on the cards

A Rs 4,700 crore rollback of Budget proposals seems to be on the anvil with Prime Minister Atal Bihari Vajpayee ruling in favour of appeasing both the BJP National Executive as well as the industry.

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