The Hindu Business Line : Lahiri upbeat on tax collections

RESPONDING to queries by captains of industry on the projected gross revenue collections in the Union Budget, Dr Ashok Lahiri, Chief Economic Advisor (CEA), Ministry of Finance, said here that the Government was confident of collections from all four areas of tax on services (adding of more taxable services, with rates up from 8 per cent to 10 per cent), securities turnover tax (now revised), education cess of 2 per cent on all taxes, direct and indirect, and the huge tax arrears.

Participating in an interactive session on the Union Budget 2004-05, organised by the Indian Chamber of Commerce, Dr Lahiri said he was particularly encouraged by the rate of growth of collections on the corporate tax front at over 36 per cent last year.

He said there should not be any shortfall in gross revenue collections this year, going by the impressive first quarterly results, which have surprised even the Government.

On the rising inflation, Dr Lahiri said while this was certainly a cause for concern, there was no need to panic, as it was not an alarming situation. Assuring the industry that the Government was constantly monitoring the situation, in terms of the WPI figures, he said the rise in index was only on account of prices of power and fuel, sugar and some related products. Admitting that the behaviour of the weighted average WPI was worrying, he said:"The Government is fully alert to the situation".

Commenting on the fiscal consolidation front, he said the focus was now on growth with stability and equity.

Fleshing out the salient features of the Budget, Dr Lahiri said universal access to education and gainful employment in agriculture were the two main planks, which also enjoyed near political unanimity of purpose. Pointing out that agriculture has not been performing satisfactorily, considering that 60 per cent of our peopledepend on it for livelihood, he said the Budget seeks to provide the key to rural development and welfare for raising agriculture's share in GDP.

On the projected plan to replicate the Anand Model in other parts of the country, and other programmes for doubling agriculture growth and increasing the per capita consumption of foodgrains, Dr Lahiri said the key element was implementation, where we have to benchmark ourselves against international standards. "We not only need to create the facilities like roads etc, but also have to learn to maintain them for creating that much needed supply-chain management in grain movement throughout the country."