Chennai: The union government will soon set up a core team and initiate action to recover the huge tax arrears (Rs15,000 crore direct taxes and Rs3,000 crore indirect taxes).

Addressing the press post budget Vineeta Rai, revenue secretary however pegs the realisable target at around Rs8,000 crore. The arrears are not due to tax demands ending up in courts but due to administrative difficulties in collecting the same.

She also said that the government is committed to bring down the customs duty to the ASEAN levels. "All the customs duty initiatives announced in the budget are revenue neutral."

While justifying the levy of turnover tax on investments, officials hope to collect around Rs4,000 crore during the remaining period of the current fiscal. The annualised target is around Rs7,500 crore.

Rai said that the withdrawal of Varishtha Pension Bima Yojana is not anti senior citizen move as the government will be introducing a similar deposit scheme bearing an interest rate of 9 per cent. The proposed scheme will be open for those who are 60 years and above and the scheme will be administered by post office and nationalised banks. Funds deposited under the scheme will be locked in for a minimum period of five years.

Queried about the central government''s contribution to the equity of the proposed special purpose vehicle that would implement the Sethusamudram canal project, finance secretary D C Gupta said the centre''s role will be to provide the guarantee so that the special purpose vehicle could raise the needed funds.

On the issue of downsizing the bureaucracy he said that the government fills up only the direct recruitment vacancies and lot of outsourcing is done. Further the total expenditure on central government employees excluding railway, postal and para military services is small.