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 Mumbai:
Former Indian Finance Minister P Chidambaram has said
the Union Budget for 2003-04 will be a soft budget without
any drastic changes in direct and indirect taxes. In his
opening words he stressed about the abolition of the dividend
tax.
Commenting
on the remarks by Vijay Kalantri, president, All India
Association of Industries (AIAI), that the reintroduction
of the dividend tax has contributed to make all tax provisions
as tedious as TDS, Chidamabaram said the surcharge on
tax and introduction of Cenvat are also retrograde steps.
Kalantri, however, agreed with Chidambaram that the abolition
of the dividend tax is a milestone in the history of the
capital market.
Kalantri
hoped Singh would do away with the dividend tax, provide
incentives for investments and savings like investment
allowance. “As there is no social security system
in India it is unfair to slash interest rates on savings,
although he is conservative in his thinking.”
Speaking
on ‘Pre-Budget Thoughts’ at a meeting arranged
by AIAI and its initiative, Young Entrepreneurs Society
(YES), Chidambaram said the existing sops on housing and
domestic savings are unlikely to be changed in view of
the forthcoming assembly elections in several states.
Chidambaram
said the forthcoming Budget is going to put forth modest
aims that are to be achieved. “The major focus is
going to be on the topic of taxes which seems to be in
dire straits. At this point of time it is crucial to bring
about stability in tax rates and no furthering tampering
should be done as was the case in previous budgets.”
He advocated a sharp decrease in the corporate tax to
30 per cent.
“Kelkar
was a good economist but in an election year votes are
more valuable than revenue yields for any government as
the budget is not only economic but politics, and you
have to take all sections of the society’s into account,”
he said.
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