The Hindu : National : A regressive tax regime: CPI

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Wednesday, Mar 02, 2005

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National

A regressive tax regime: CPI

By Our Special Correspondent

NEW DELHI, MARCH 1. The Communist Party of India today attacked several aspects of the budget proposals of the Finance Minister, P. Chidambaram, and accused him of having unleashed a "regressive" tax regime in the country without having made any attempt to improve the tax-gross domestic produce ratio.

"The Finance Minister has provided more relief to those in the higher bracket. Those earning over Rs. 10 lakhs would stand to benefit by Rs. 45,000 while those with an income of Rs. 1.5 lakhs would get a relief of Rs. 14,000. This is regressive and inverted tax system," the CPI deputy leader in the Lok Sabha, Gurudas Dasgupta, said. The party chief whip, Ajoy Chakraborty, and senior leaders S. Sudhakar Reddy, M. Appadurai and Prabodh Panda were present.

However, the party said that never before did the Union Budget provide a direction aimed at allocating resources for rural infrastructure development. Terming it a "new beginning and new direction," Mr. Dasgupta said the party would not like to take credit for it even though the Left parties had suggested higher outlay for social sectors in the budget.

At the same time, the party said it would not refrain from raising issues and would do so both inside and outside Parliament. "If necessary we shall agitate to draw the attention of the Government but would not do anything to bring back the Bharatiya Janata Party."

While lauding the increased allocation for the social sector, Mr. Dasgupta said that unless it was accompanied by land reforms investment may not give the desired result. The party criticised the move to open three more sectors to foreign direct investment on the ground that such investment could not be utilised to alleviate poverty.

"The Government must realise the serious deficiency and shortcoming in the budget and seriously think about change of its basic attitude, its heavy reliance on FDI instead of mobilising domestic resources."

`Dangerous'

Similarly, it said, the move to reform the banking sector was "fraught with danger" since it would mean virtually handing over national savings deposited in banks of more than Rs. 18 lakh crores to foreign corporates and the domestic private sector.

Merger of banks in the name of consolidation would essentially dilute social banking and the attitude towards cooperative banking was also "highly inimical to national interest."

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