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Sinha dismisses as speculation levy of surcharge

Finance Minister Yashwant Sinha on Monday dismissed as 'speculation' that government was considering a 'Gujarat Surcharge' on direct and indirect taxes in the budget to mobilise resources for reconstruction of earthquake-affected areas in the state.

"I do not know from where it emanated. It is all speculation and I do not comment on speculation," Sinha told reporters after his meeting with visiting European Union Commissioner for external relations Chris Patten.

Reports after the meeting of economic ministers with Prime Minister had said that Atal Bihari Vajpayee had given the green signal to Sinha for imposing a surcharge on direct and indirect taxes for covering the huge expenditure burden from the devastating earthquake that has taken a toll of over 20,000 lives in the state.

Sinha also said there was no estimate of the extent of damage as yet as the first priority now was to carry out relief work to provide succour to the affected people.

However, he said that the Centre would ensure that there were no constraints on resources, including ways and means advances to the state.

Sinha said that in the short-term, the foremost task is to carry out relief for which all help was being provided and in the medium term, enormous resources were required for reconstruction and rehabilitation of the affected people.

Multilateral financial institutions were being approached for financial assistance of $1.5 billion of which $1 billion would be from the World Bank and $500 million from the Asian Development Bank, he said.

He dismissed all the preliminary reports of the damage in financial terms saying work on it would start only after providing medical and other relief to the affected people.

But he said additional resources would have to be generated for reconstruction in the medium term which would be taken care of by the government.

He said the earthquake would have some impact on the economy as Gujarat is one of the industrialised states in the country and, hence, it would affect the gross domestic product.

Even though no major industrial establishment in the state have been hit by the quake, restoration of these factories would take some time as workforce had been badly devastated in the quake and this would have impact on exports and other industrial activity.

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