PC’s last shot at grandstanding before logging out

Tags: News
Major economic reforms will take a back seat as the government presents the vote-on-account (interim budget) on February 17 ahead of the 2014 general election scheduled this summer.

However, finance minister P Chidambaram will not ignore the temptation to add a dash or two of populist incentives by tinkering with excise and customs duties, and doling out some subsidies to target sections of voters.

Chidambarm’s last brush with budget arithmetic as the UPA’s finance minister will be budget for four months of government expenses between April and July. The new government will present a fresh Budget sometime in July after ascending the seat on power on Delhi’s Raisina Hill.

In 2004, the NDA’s finance minister Jaswant Singh made a 12-page speech in Parliament, while presenting his vote-on-account. In 2009, Pranab Mukherjee, as the UPA’s finance minister bettered with an 18-page speech. “So, I have two numbers to choose from between 12 and 18. We can make any proposal short of amending any law,” was Chidambaram’s short statement to the media.

That leaves little doubt that Chidambarm wants to make big his parting statement.

"We cannot propose amendments to the Income-Tax Act, Customs Act or the Excise Act. But any proposal short of amending a law can be made. We can also outline vision for the future," he said, when asked if the interim budget would contain some tax changes.

Whatever changes are required to be made to excise rates or service tax rates without an amendment to the law "are being made and will be made,” he said. There is growing demand from gems and jewellery associations for rollback of the hike in import duty of gold to 10 per cent that was imposed to curb runaway imports of yellow metal in a bid to rein-in the widening current account deficit.

"We have made a couple of changes last week. We will continue to make those changes until the term of this government is over if they do not require parliamentary legislation or sanction. We will have to notify the changes and place the notification in Parliament," he said.

Major economic reforms will take a back seat as the government presents the vote-on-account (interim budget) on February 17 ahead of the 2014 general election scheduled this summer.

However, finance minister P Chidambaram will not ignore the temptation to add a dash or two of populist incentives by tinkering with excise and customs duties, and doling out some subsidies to target sections of voters.

Chidambarm’s last brush with budget arithmetic as the UPA’s finance minister will be budget for four months of government expenses between April and July. The new government will present a fresh Budget sometime in July after ascending the seat on power on Delhi’s Raisina Hill.

In 2004, the NDA’s finance minister Jaswant Singh made a 12-page speech in Parliament, while presenting his vote-on-account. In 2009, Pranab Mukherjee, as the UPA’s finance minister bettered with an 18-page speech. “So, I have two numbers to choose from between 12 and 18. We can make any proposal short of amending any law,” was Chidambaram’s short statement to the media.

That leaves little doubt that Chidambarm wants to make big his parting statement.

"We cannot propose amendments to the Income-Tax Act, Customs Act or the Excise Act. But any proposal short of amending a law can be made. We can also outline vision for the future," he said, when asked if the interim budget would contain some tax changes.

Whatever changes are required to be made to excise rates or service tax rates without an amendment to the law "are being made and will be made,” he said. There is growing demand from gems and jewellery associations for rollback of the hike in import duty of gold to 10 per cent that was imposed to curb runaway imports of yellow metal in a bid to rein-in the widening current account deficit.

"We have made a couple of changes last week. We will continue to make those changes until the term of this government is over if they do not require parliamentary legislation or sanction. We will have to notify the changes and place the notification in Parliament," he said.

Major economic reforms will take a back seat as the government presents the vote-on-account (interim budget) on February 17 ahead of the 2014 general election scheduled this summer.

However, finance minister P Chidambaram will not ignore the temptation to add a dash or two of populist incentives by tinkering with excise and customs duties, and doling out some subsidies to target sections of voters.

Chidambarm’s last brush with budget arithmetic as the UPA’s finance minister will be budget for four months of government expenses between April and July. The new government will present a fresh Budget sometime in July after ascending the seat on power on Delhi’s Raisina Hill.

In 2004, the NDA’s finance minister Jaswant Singh made a 12-page speech in Parliament, while presenting his vote-on-account. In 2009, Pranab Mukherjee, as the UPA’s finance minister bettered with an 18-page speech. “So, I have two numbers to choose from between 12 and 18. We can make any proposal short of amending any law,” was Chidambaram’s short statement to the media.

That leaves little doubt that Chidambarm wants to make big his parting statement.

"We cannot propose amendments to the Income-Tax Act, Customs Act or the Excise Act. But any proposal short of amending a law can be made. We can also outline vision for the future," he said, when asked if the interim budget would contain some tax changes.

Whatever changes are required to be made to excise rates or service tax rates without an amendment to the law "are being made and will be made,” he said. There is growing demand from gems and jewellery associations for rollback of the hike in import duty of gold to 10 per cent that was imposed to curb runaway imports of yellow metal in a bid to rein-in the widening current account deficit.

"We have made a couple of changes last week. We will continue to make those changes until the term of this government is over if they do not require parliamentary legislation or sanction. We will have to notify the changes and place the notification in Parliament," he said.

Analysts felt that while Chidambaram may not stretch himself to make major changes in taxes, as that would entail amendments to the tax law, he would nevertheless attempt to throw out doles to voters that may involve a certain amount of expenditure by the government.

The long-awaited insurance reform bill, aimed at raising the FDI cap to 40 per cent from the present 26 per cent, will not be taken up in the short parliament session commencing on February 5.

“In the insurance bill they (opposition parties) have made it very clear that they will not pass it (in the upcoming session),” the finance minister said, adding that there was no consensus among states on the goods and services tax (GST) either.

In view of the heavy agenda before the last session of the 15th Lok Sabha, which will have only 12 sittings, the government is unlikely to push the direct taxes code (DTC), which seeks to replace the over 50-year-old Income-Tax Act, 1961. It is quite likely that the new government may not consider the DTC at all, as some sections of the tax department and some political parties are still not fully in favour DTC.

The Sebi Amendment Act, which aims to give more teeth to the market regulator to effectively crack down on ponzi and other illegal collective deposit schemes was very much on the priority list, Chidambaram said.

“I raised it in the all-party meeting. I pointed out that the bill was promulgated twice,” he said, adding he expected the standing committee on finance on Sebi amendment bill to submit its report by tomorrow or the first day of the session to enable Parliament to approve it.

“We will be doing a great disservice to thousands of depositors whose money is at stake in collective investment schemes, which were not adequately regulated. It’s imperative that this bill is passed,” he said, regretting that not one (political party) assured that they will allow the bill to be passed.

He, however, said the government was not ready with the Forward Contracts Regulation Act. “We are not yet ready with the amendments,” he said.

The amendment bill seeks to provide the commodity market regulator FMC more financial autonomy, encourage participation of institutional investors and facilitate introduction of new products like options and indices.

On the Shah Commission report, which went into illegal mining in various states, Chidambaram said the cabinet had referred it to the committee of secretaries (CoS) to sit together and draw up the action taken report (ATR). As it was essential to table the report in Parliament along with the ATR, it would be done only when the latter is ready.

The last session of the 15th Lok Sabha is expected to be stormy, particularly over the Telengana bill, which the government is keen to bring in the short 12-day session. As many as 39 bills, including the anti-corruption legislations being pushed by Congress vice president Rahul Gandhi, have been listed in the session, which is a continuation of the winter session that ended last December.

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