No changes in I-T rates — Sinha

New Delhi, Nov 18 : Finance minister Yashwant Sinha has ruled out any changes in the income-tax rates in the next Union Budget, stating th...

New Delhi, Nov 18 : Finance minister Yashwant Sinha has ruled out any changes in the income-tax rates in the next Union Budget, stating that they were already at moderate levels. The government, Sinha said, would introduce the Fiscal Responsibility Act (FRA) and other important economic legislation in the winter session of the Parliament beginning Monday.

Addressing a conference of chief commissioners and directors general of income-tax here on Saturday, Sinha said: "We have very moderate rates of income-tax. There is no need to muck about with the (existing) rates in the forthcoming budget". "The real challenge is tax compliance. We have to modernise methods and computerise to increase compliance and tax base," he said, adding that the target for the number of I-T assessees would have to be doubled to 50 million by 2003-04.

Talking to reporters on the sidelines of the function, Sinha said, "we are going ahead with the FRA, Convergence Bill, Competition Law, New Insolvency and Bankruptcy Law, amendments to Banking Act and Companies Bill in the Winter Session to carry forward the next phase of reforms."

Story continues below this ad

"The strategic management group under the Prime minister’s office is reviewing all large projects. A great deal of follow-up action is being done to ensure that all ideas (on reforms put forward) before and after the budget are being implemented," he said, admitting that the second phase of reforms was more difficult as it involved a lot of changes in laws.

As changes in legislations could be brought about only through political consensus, Sinha said, "These reforms cannot move at a scorching pace. It will be carried out at a pace which is possible in a country having a democratic set-up." Referring to government’s commitment to speed up infrastructure development, Sinha said in the last four weeks, "We had discussions for the clearance of fast-track power projects, PM’s highway projects and disinvestment."

As already stated by Disinvestment Minister Arun Shourie, the Finance Minister said the government was now confident of completing Air-India and Indian Airlines sell-off within the current fiscal. On the rollback of domestic oil prices, Sinha declined to comment saying he was not authorised to speak on the subject. He was noncommittal on whether the targetted Rs 10,000 crore disinvestment would be achieved this financial year, through the sell-off of Air-India and Indian Airlines.

Referring to the demands from states for more allocations, especially during natural calamities, Sinha said "This demand is not a sustainable system. The only way the situation could be improved is by raising revenue."

Story continues below this ad

On sales tax reforms, Sinha said the Centre was in touch with state chief ministers to carry out sales tax rationalisation. There was a general misconception about the possibility of a large cut in expenditure, Sinha said, adding that almost 95 per cent of government expenditure was "rigid and inflexible".

Earlier, speaking on the occasion, CBDT chairman A Balasubramanian said that the focus in the current year would be on processing salary returns through computerised system. He remarked that the department was fully alive to the grievances of tax-payers and added that these would be addressed on a priority basis.

Taking a dig at prophets of doom who painted a gloomy picture of the economy, Sinha said that the slowdown in the first quarter of the current year was being "blown out of proportion".

"The slowdown (in the first quarter) is being projected as though there is a catastrophe and this is not true as it is evident from the fact that the revenue is buoyant," Sinha said. Without elaborating on the measures that have been taken to deal with the slowdown, Sinha said he was confident that as in the past all projections of a lower growth this year would be proved wrong.