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'Our effort was to decontrol the economy further'

BS Bureau

The thrust of the Budget for the year 2001-02 is to give a much needed boost to the primary markets and going ahead with the divestment programme, while making a move towards downsizing the government apparatus, senior finance ministry officials said.

Addressing a media briefing after the Budget here, the North Block mandarins also clarified that they were not trying to protect the domestic industry.

"The Budget is not influenced by the surge in imports from across the borders. We are not alarmed by such developments," revenue secretary S Narayanan said.

"We asked ourselves what needed to be done and several factor went into the making of the Budget. Our focus was to decontrol the economy, while also pushing for reforms," finance secretary Ajit Kumar added.

The officials also said that the major thrust was on the primary market, essentially to boost the investor sentiments.

The government will also come out with a new manual on excise and customs by September 2001.

"Assesment of income tax returns will be completed within a year," he said. Penalties will be non-discretionary and all excise and customs rules are being simplified.

Talking about downsizing within the government, the officials disclosed that the departments of banking, insurance and capital markets in the finance ministry will be merged into a single department of finanial sector.

On the finance ministers announcement that all perks of the employees will be considered as taxable income, advisor to the finance ministry Rakesh Mohan said that perks other than those for vehicles, telephone and house rent, paid to employees in a company will be taxable and it will be mandatory on the employer to file returns as they salaries will now be taxed on the basis of cost to the employer.

"We are not going to scrutinise the salaries, though. However, we hope that the employer will file returns based on the cost of hiring the employee," he added.

Kumar said that despite pressure on government finances, the Centre is expected to bring down its market borrowing by 4 per cent to Rs 728.52 billion from the estimated figure of Rs 759.47 billion in the current fiscal.

The Budget presented in Parliament expects the short-term borrowings to more than double to Rs 45 billion next fiscal as against an estimated Rs 20 billion this year.

The government is expected to discharge loans worth Rs 265 billion this year.

Source: Business Standard

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