Rollbacks not under pressure: Sinha

LUCKNOW: Finance Minister Yashwant Sinha said on Saturday the rollback of the budget proposals giving tax concessions and rebate to the income tax payees was not done under pressure and termed it as "natural amendment".

"The amendments of the budget proposals were not new and such amendments do occur every time", Sinha told reporters here after inaugurating a seminar organised by Small Industrial Development Bank of India (Sidbi).

He said the rollback giving away Rs 2850 crore revenue was only 0.12 per cent of the total budget proposals.

This deficit would be made up by reducing expenditure and better revenue collection, he said adding Rs 10,000 crore were saved through reduction of expenditure during the last financial year.

Rejecting the criticism that his budget proposals have been harsh on the salaried and the middle class, Sinha said during the last four years the number of income tax payees had risen from 1.15 crore to 2.5 crore and all of them were not from the salaried and the middle class.

Many persons have been brought under the tax net, he said adding the government had fixed a target of increasing the number of income tax payees to five crore in the next two years.

Sinha said the proposals affecting the middle class were criticised but incentives given to the farmers and labourers were not appreciated.

Sinha justified the reduction in the interest rate on savings and said the interest rates were in accordance with inflation.

The average inflation rate is around 1.5 per cent, he said adding the interest rates in the country were more than that in any other country.

Sinha said along with the reduction in interest rates on savings, loans had also become cheaper.

Interest rates on the housing loans have registered a fall of four per cent in the last two years during which time Rs. 76,000 crore of housing loans have been given, he said.

He, however, refused to say what he would do with regard to reducing interest on the provident fund from the existing 9.5 per cent saying people would know about it at an appropriate time.

Asked about tax on agricultural income, Sinha said the states were empowered to levy tax on agricultural income and not the centre.

About the apprehensions among investors of MIP scheme of the UTI, he said MIP was under the control of the Securities and Exchange Board of India.

The government is alive to the need to protect the interests of the investors, he said.

When asked about instances of embezzlement of investors'' money by several financial companies, he said promoters of several such companies had been arrested and legal action initiated against them.