New Delhi, Mar 11: Finance Minister Pranab Mukherjee today appeared to hint at a review of some tax proposals including those on hospitals while he announced extension of interest subsidy to fishermen and fish farmers and concessions for education and healthcare sectors.
Replying to the general discussion in the Lok Sabha on the Budget for 2011-12, he also announced a Rs 2,370-crore bonanza for MPs by raising allocations under MPLAD scheme from Rs 2 crore to Rs 5 crore.
"Since the presentation of the budget 2011-12, I have received several suggestions and representations, including valuable feedback from members on taxataion proposals.
"These are under examination. I shall respond to these issues in my reply to the discussion on the Finance Bill, 2011 later during this session," Mukherjee said in his hour-long reply to the two-day debate on budget.
After the presentation of the budget, there have been demands made both inside and outside Parliament for rollback of the 5 per cent service tax on centrally air-conditioned private hospitals of 25 beds or more and diagnostic services provided by them.
There was also a demand for withdrawl of Minimum Alternate Tax (MAT) of 18.5 per cent on book profit on special economic zone (SEZ) units and developers.
Maintaining that UPA government is sensitive to the problems faced by 20 lakh fish farmers and fishermen, the Finance Minister announced the extension of the existing interest subvention scheme of providing short-term loans to farmers at 7 per cent interest with additional interest subvention for timely repyment to fish farmers and fishermen.
He said investment in education and health sectors has a high priority in government's policy framework and there is a need to further accelerate the creation of infrastructure in this domain.
Mukherjee announced that henceforth capital stock in educational institutions and hospitals will be treated as infrastructure sub-sectors. Accordingly, capital investment for these sub-sectors will be eligible for the viability gap funding scheme of the Finance Ministry.
After the Minister's reply, the House passed the supplementary demands for 2010-11 and relevant appropriation bills, completing the first phase of the three-stage budgetary exercise.
There will be no vote-on-account this year as Parliament proposes to complete the entire budgetary exercise, including the voting on demands for grants of various ministries, this month end itself.
Referring to the issue of rising food prices, Mukherjee took some comfort from the fact that food inflation rise came down from over 20 per cent in February 2010 to around 9 per cent.
"It is unacceptable. This figure is equally unacceptable", the Minister said, adding the government was making efforts to increase supply to tame the rising price of essential food items.
"At the beginning of last year, food inflation was 20.2 per cent, and now it is 9.5 per cent. However, this figure is equally unacceptable," he said.
Mukherjee said the high inflationary pressure, specially in food and some non-food articles, existed in other emerging economies also.
"I am not making any plea. This is not an excuse that because there is inflation in other areas there should be inflation in India also. It is not. But the fact of the matter is inflationary pressure is visible all over the world. It is not merely in our country," he said.
Linking food inflation to global developments, the Minister pointed out that the surplus liquidity is being converted into commodity.
"There are apprehensions It appears to be the ground reality that surplus liquidity has been converted into commodity such as oil and foodgrain", he said.
Mukherjee said such a trend was also noticed in other essential commodities. "These are the economic factors. We may try to wish them away but we cannot because the global linkage is here..", he said.
The government has taken various steps in the Budget like special initiative for agriculture, supply chain management, promotion of coal chains among others, Mukherjee said. "These are intended to address issues of demand and supply constraints", he said.
He also expressed concern over the state of distribution network in the country including the PDS (Public Distribution System) for Below poverty line (BPL) families saying it was not up to the mark.
The Minister said the government has received a number of suggestions from the expert group headed by Gujarat Chief Minister Narendra Modi on revamping the PDS and added "there are some suggestions which could be implemented."
Mukherjee allayed apprehensions that global events like high oil prices may impact growth and exuded confidence that the economy would return to nine per cent growth in 2011-12.
On black money, Mukherjee said, the government was revising the Double Taxation Avoidance Agreement (DTAA) with several countries and signing Tax Information Exchange Agreements (TIEAs) with tax havens. PTI
