Pranab hints at review of tax proposals

NEW DELHI: Finance minister Pranab Mukherjee on Friday indicated that the government will review some of the contentious tax proposals announced in the Budget.

Officials in the ministry said that at least two proposals are going to be revisited. The first one pertains to the levy of service tax on healthcare, including diagnostic tests. Sources said that the 5% levy on diagnostics would certainly be dropped given the pressure from doctors, hospitals and even members of the Congress party. In case of the proposed 5% levy on treatment in centrally airconditioned treatment centres with 25-bed in-patient facility, the ceiling may be enhanced.

On March 1, TOI was the first to report that the levy was being reviewed.

In addition, officials said that the proposal to levy 18.5% minimum alternate tax on special economic zones' developers and units was also being reviewed. While the broad contours of the revised proposal relating to MAT on SEZ, whose implementation has been advanced by a year, has been worked out, a final decision was yet to be taken, a senior official told TOI.

The commerce department has already opposed the proposal. Expressing surprise at the move, commerce and industry minister Anand Sharma had lodged his protest with Mukherjee. As reported by TOI on Sunday, the finance minister had said that he would consult his colleagues on the issue.

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Pranab Mukherjee gifts MPs Rs 5cr to nurture seats

NEW DELHI: Aware of the need to keep MPs in good humour if the government's legislative agenda – including several reform bills – is to pass muster, finance minister Pranab Mukherjee on Friday doled out a large sop to them by increasing local area funds to Rs 5 crore a year from Rs 2 crore.

He also announced benefits to fisherfolk by extending preferential interest rates available for farmers to the seafaring community as well. To begin with, Mukherjee, who announced the government's intent to move forward on fiscal consolidation in the Budget, told Lok Sabha on Friday that he was more than doubling the allocation under the MPLAD scheme to Rs 5 crore.

The feel-good move will burn a Rs 2,370 crore hole in the exchequer's pocket and comes despite concerns expressed by the comptroller & auditor general. States like Bihar have scrapped a similar scheme for MLAs as there were frequent complaints of lack of transparency.

Responding to the general discussion on the Budget in the Lok Sabha, Mukherjee, however, assured the House that the concerns expressed by CAG would be addressed while formulating the guidelines and the auditor's report will be placed in Parliament shortly.

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.

The minister also announced loan concessions for fishermen in the form of interest subsidy to those who repay their bank dues on time. The move is expected to benefit around 20 lakh fishermen, several of whom are in Kerala, Tamil Nadu and West Bengal where elections are to be held next month. Mukherjee said the details of the scheme would be announced separately.

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MCD may be split into 5

NEW DELHI: The Municipal Corporation of Delhi (MCD) may be split into five parts. The first political committee constituted by chief minister Sheila Dikshit last month to look into restructuring of the corporation before the 2012 municipal elections agreed in principle to study the option of splitting MCD into five parts at its first meeting on Friday.

Instead of the much-talked about trifurcation formula, the committee, which has revenue minister A K Walia as its chairman, has narrowed down its scope of study to the suggestions of the Vijay Kumar Malhotra Committee and Deep Chand Bandhu Committee reports. Both recommend the division of MCD into five corporations. The first political committee to restructure the MCD was constituted by the CM on February 7. It was supposed to have three ministers and two BJP MLAs. Besides Walia, urban development minister Raj Kumar Chauhan and transport minister Arvinder Singh Lovely are on board. The leader of the opposition from BJP, Vijay Kumar Malhotra, and senior BJP MLA Jagdish Mukhi were called upon to join the committee.

However, the BJP opted out, labelling the timing of the constitution of the committee politically motivated, considering that the civic polls are slated for early next year. The BJP said they did not agree with the terms of reference, which merely focus on MCD and leave out DDA and the police. Friday's meeting happened without the BJP. On their absence, the ruling party members hit back saying that if the BJP did not agree with the terms of reference of the committee they could have at least joined the process and also put forth their views on DDA and police. "No one would have stopped them from discussing that," said Lovely.

After the meeting, revenue minister Walia said that they had been apprised of the findings of reports of all previous committees by chief secretary Rakesh Mehta. "A consensus was reached in principle that dividing the MCD was essential to improve efficiency," he added. There are six reports on restructuring of MCD so far and all recommend division of the corporation into smaller parts.

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