M A I N   N E W S

FM hints at rollback of tax on cash withdrawal
Tribune News Service

New Delhi, March 17
Finance Minister P Chidambaram today dropped enough hints that the controversial proposal to impose tax on cash withdrawal from banks would be rolled back and was unlikely to be applicable to savings bank account holders.

“Let me make it clear that there is no tax imposed but a tax proposed. There will be good news and it will be announced in detail when the Finance Bill 2005 is taken up for discussion”, Mr Chidambaram said while replying to a marathon 16-hour debate on the Union Budget 2005-06 in the Lok Sabha today. In the Budget, the Finance Minister had proposed 0.01 per cent tax on cash withdrawal of more than Rs 10,000 from banks.

He said that government was “sensitive” to the concerns raised by members on the issue, particularly for those individuals who are withdrawing money from savings bank accounts.

The Finance Minister also announced that Prime Minister Manmohan Singh has written to all ministries about to come out with detailed statements on outcomes and have instructed that outlays must be converted to real outcomes.

“The minister should be made accountable to Parliament…. We intend to monitor throughout the year the investment that has taken place during the year in a particular sector and also the number of additional jobs that are being created in the sector. During the year, a detailed statement on this will be tabled in Parliament”, Mr Chidambaram said.

The ambitious ‘Bharat Nirman’ scheme, which has raised eyebrows about the feasibility of the programme, the Finance Minister sought “cooperation from the states” even as he proclaimed that it was not a “pipedream”.

“The ‘Bharat Nirman’ scheme is not a pipedream. It is a business plan and we are approaching it in a businesslike manner. If the states join us in this plan, this can be implemented”, he said.

The Food for Work Programme, which is currently under implementation, will eventually be merged with the National Rural Employment Guarantee Programme (NREGP) after the NREGP Bill is passed by Parliament.

The Planning Commission has identified 170 districts for receiving grants under the Backwards Regions Grants Fund. “The objective is to ensure that investments translate into jobs. There is a lot more to be done. There are at least half-a-dozen programmes where Parliament will have to exercise great oversight. The Food For Work Programme, the National Rural Health Mission, the Mid-May Meal Scheme and Sarva Shiksha Abhiyan are all ambitious programmes”, he said.

The Union Government is largely a provider of funds and the implementation part heavily depends on states. “I urge upon the state governments to improve governance. Funds allocated for particular programme should be diverted by state governments to other programmes”, he said.

He also said the government will shortly set up a regulatory for the micro-finance institutions and this will “give a big boost to credit flow to small and tiny enterprises”.

The Finance Minister also clarified that the UPA government has not abandoned the National Highway project of the erstwhile NDA government. “The government is continuing with greater vigour the NHDP project”, he said. Even as he complimented the BJP members for initiating the programme, he hastened to point out that the pace of implementation of the project during the UPA regime has been much faster than during the earlier regime.

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