New Delhi, January 10
If the Communists had their way, then ‘luxury’ goods, cars, a number of other services and transactions in the stock market would attract the knock of the tax authorities to fund their pet social sector projects.

They have come up with this alternative proposal after rejecting the disinvestment of profit making PSUs. The 13-point proposal to be submitted by the Communists at the UPA-Left Coordination Committee meeting on January 12 calls for measures to tax the rich to undertake social sector projects.

In line with their stand to tax the rich, the CPM, CPI, RSP and Forward Bloc said their alternative measures would generate huge additional revenue which could be used to fund prestigious projects like the National Rural Employment Guarantee Scheme.

They, however, maintained that the government should not divest its stakes in the profit-making PSUs, slash subsidies in the farm sector or cut expenditure on social sector projects.

Tax measures suggested by the Left parties include taxing security transactions and capital inflow and increasing tax rates on luxury goods and services, including cars.

The note, to which they are giving final touches, asked the government to raise tax on short-term capital gains to 15 per cent to enhance revenue-generation and stabilise hot money flows.

Maintaining that the accumulated cash reserves of 50 central public sector undertakings amounted to over Rs 2.2 lakh crore amounting to about 7.5 per cent of the GDP, the parties pointed out that there was under investment in the PSUs and sought its reversal in order to reinvigorate these units.