NEW DELHI: Finance Minister Manmohan Singh has said he would examine with an open mind the demand for a further hike in the personal Income. Tax exemption limit and retention of the concessions under Sections 80 L of the Income Tax Act.
In an interview with UNL Dr Singh, however, maintained that he had taken the right decision in proposing to raise the exemption limit to only Rs. 28,000 in his 1992-93 budgets as part of a difficult balancing act.
I will look at all suggestions coming from various quarters with an open mind”, he said.
The Finance Minister said he proposed to push ahead in the coming months with the coming months with the “unfinished agenda” of economic reforms, including the restructuring of the financial system and strengthening of the social and infrastructure sectors.
Dr Singh expressed regret over recent controversies about the government’s economic policies, saying these had hurt India’s image abroad and affected the flow of investment into the country.
Taking about the demand for a further raise in the Income Tax exemption limit, Dr Singh said the consequences of such a move had to be examined first.
He said 85 per cent of the Income tax revenue went to the states many of which were in dire financial difficulties. “I can be very generous, but at whose cost?” he wondered.
Dr Manmohan Singh said the country must make up its mind about whether it wanted more funds for essential programmes like primary education and health care, which were the responsible of the states. “How are the states going to invest in primary education if they are denied this amount? This is a difficult balancing act I have to perform,” he said.
According to him, the Center would for intense lose only Rs 150 crore if the exemption limit were raised to Rs. 1,000 crore. (On the question of reforms in the corporation tax system Dr Singh said he was hoping to get the Chelliah Committees recommendations on the subject by April 30 at promised by it.
As thing stand, the changes could be made only in the next year’s budget, he said, adding that the budget proposals, Dr Singh had left the corporation taxes unchanged, pending receipt of the Chelliah Committees report.
The Finance Minister said he hoped tone tin about Rs. 150 crore from the move to impose a presumptive tax of Rs 1 400 a year on shopkeepers and other retailers, The modalities of bringing them into the tax net were still being worked out and efforts would be made to enlist the cooperation of state governments, local bodies and other agencies, he said,
Article extracted from this publication >> March 27, 1992
