Congress may move against Budget proposals

Party sources said that the Congress does not mind concessions being offered to the poorer classes though. The party would also move against the tax exemptions on dividend given to companies rather than to shareholders and the voluntary disclosure scheme, which proposed a 30 per cent tax on disclosed income. This, the party felt, would help only scamsters and hawala operators. The party will decide on its final stand after a discussion next week, party spokesman V N Gadgil said..

Former union finance minister Manmohan Singh gave a detailed presentation on the budget and clarified the doubts of some members on the subject. After him came other former finance ministers Pranab Mukherjee and Debi Prasad Pal. All of them said the economy was not in a good shape, that the growth rate was slipping and that inflation was on the rise.

The Congress leaders felt the euphoria generated by the budget would not last when it began tackling the issue of the oil pool deficit. Though Manmohan Singh supported the reduction in income tax, he was critical on the low tax for voluntarily disclosed black money. He was even more unhappy with the cut in corporate tax by 35 per cent, pointing out that even the industry had not asked for it.

He felt a poor country like India could not bring income tax down from 40 to 30 per cent, and lamented the apparent lack of concern about the infrastructure and social sectors. The fiscal deficit of five per cent was possible only due to the absence of Rs 100 billion for development. Primary education, agriculture, rural development and infrastructure areas like power, coal and petroleum were ignored, he said.

The party complained that schemes initiated by the Congress, like the mid-day meal, the national social assistance programme and housing for the poor were neglected. This was only half a budget, party officials said, adding that the second half would only follow later.