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Savings account holders may be spared

NEW DELHI, MARCH 17. Home savings account holders may heave a sigh of relief as they are likely to be exempted from the "nominal" 0.1 per cent tax on cash withdrawal of Rs. 10,000 and above from banks. In effect, the tax is likely to be levied only on cash withdrawal bank transactions of current account holders.

A broad indication to this effect was given today by the Finance Minister, P. Chidambaram, who referred to the "good news" soon for home savings account holders in his winding-up reply to the three-day discussion in the Lok Sabha on the Union budget for the new fiscal.

"I am sensitive to the concerns expressed by members. No tax has been imposed. Only it has been proposed. You will get good news when we discuss the Finance Bill," Mr. Chidambaram said before moving the Bill for clause-by-clause consideration of the House.

Fringe Benefits Tax

Referring obliquely to the other tax proposals, including the Fringe Benefits Tax (FBT) that the corporates are agitated about, the Minister said that he was not dealing with any aspect of the Finance Bill today. However, "that does not mean I am not sensitive to the concerns expressed by you. I will deal with this in greater detail when we take up the Bill,'' he said.

On the general complaint, especially referred to by the BJP leader, Vijay Kumar Malhotra, that pensioners and senior citizens had got a raw deal, Mr. Chidambaram, in a lighter vein, remarked: "We [the UPA] are here to remove the wrinkles on the face of senior citizens. Women and senior citizens are our constituency, and not yours."

Apart from offering pointed replies to the criticism voiced by members during the 15-hour discussions, the Minister took the opportunity of explaining, yet again, the basic philosophy of the budget.

He said the proposals were aimed at investment, growth and stability with equity and justice. The tax rates proposed, he said, were moderate to ensure stability in revenue generation and there were enough incentives to promote savings too. Noting that the people should spend 60 per cent of their income to spur production and save 40 per cent to promote fresh investments, he said: "In a country like India, aspirations drive consumption and consumption drives production."

Substantiating with data and allocation figures, Mr. Chidambaram asserted that the UPA Government had not strayed from the objectives of the National Common Minimum Programme (NCMP). While the allocation had been stepped up by Rs. 25,000 crores for social schemes to over Rs. 75,000 crores in the budget for 2005-06, he said, "We will step up the allocation further for NCMP schemes next year so that we can be nearer to our goals."

Hailing the NDA Government's "innovation" of submitting an action taken report (ATR) on the budget proposals, Mr. Chidambaram said the Government had nearly implemented all barring two or three proposals. And these too, would be implemented before the end of the year, he said.

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