Govt laughs its way to coffers; VDIS nets Rs 10,050 crore

NEW DELHI, January 3: In almost one stroke, as it were, Finance Minister P Chidambaram and his Revenue Secretary N K Singh have emerged vict...

NEW DELHI, January 3: In almost one stroke, as it were, Finance Minister P Chidambaram and his Revenue Secretary N K Singh have emerged victorious over all their critics. With a record 4.66 lakh people across the country declaring an absolutely astounding Rs 33,000 crore of undisclosed income under the voluntary disclosure of income scheme (VDIS), Chidambaram’s dream-budget is clearly back on the rails — the 5 per cent expenditure cut announced in September when the budget looked like it was going for a toss, has also been restored.

Waves of complete disbelief swept through the crowded press conference as the Finance Minister announced the final booty for the government — Rs 10,050 crore. Not surprising, for the revenue department and N K Singh kept the entire nation guessing by downplaying the scheme’s success in its last few days. When media reports said that around Rs 6,000 crore had been mopped up a few days prior to December 31, Singh had said this was an exaggeration, done in order to make the final collections look poor. Not surprisingly, Singh had the last laugh.

In the event, the Rs 27 crore ad-spend for the campaign — Rs 3 crore less than the original budgeted amount — worked out to be one of the cheapest in the history of the country’s tax collection. As against the normal cost of collection of around 1.5 per cent of total tax revenues, VDIS cost a mere 0.27 per cent, Chidambaram told reporters here today.

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While announcing that the income tax authorities would now be launching a new campaign — starting January 5 — to widen the tax net, Chidambaram also announced a Rs 100 crore bonus for the income tax department. A fund will be set up on the lines of the Central Board of Excise and Customs funds, he said at a press conference here on Saturday. A `navratna’ type of policy of empowerment for income tax officials was also announced, with commissioners now free to use their manpower and budgets as they pleased, to meet their revenue collection targets.

Giving details of the collections, a jubilant Chidambaram said “VDIS has been a total and resounding success.” Considering the figures, that seemed to be an understatement. Collections through VDIS 1997 was much more than the previous such five schemes, which taken together yielded Rs 776.63 crore to the exchequer and the amount declared totalled Rs 12,636.51 crore.

The response to the scheme manifested that “given a fair and reasonable chance people would like to lead a clean life, the Finance Minister said.

Chidambaram also reiterated that total confidentiality would maintained with regard to declarants. He said soon after the certificates were issued to the declarants, all the forms of the VDIS would, “put in a packet and sealed.” These packets would not be opened under any circumstances, he said and added that CBDT would look into the ways for, “storing them and later phasing them out.”

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Referring to the question of unusual declarations, the minister said, the number of cases were very few. Unusual declarations were reported from only two jurisdictions.

Chidambaram said that the matter was subjudice as the writ was pending the in the Delhi High Court and the CBDT would deal with these cases in accordance with the directives of the Court.

Although the Finance Minister refused to share the information about the collections from different centres, he did point out that maximum collection was reported in Mumbai.