If the government cannot contain inflation, it must at least provide some tax relief.
That was the message for finance minister P. Chidambaram from across the political spectrum during the discussion on the Finance Bill, 2007, in the Lok Sabha on Monday.
Members of the ruling United Progressive Alliance (UPA), including the Congress party, joined the Opposition in raising concern over the twin burden imposed by rising prices and hardening interest rates.
While members of the Bharatiya Janata Party and other opposition parties demanded an increase in the exemption limit for tax purposes, the congress’ Sandeep Dikshit suggested that the finance minister link this limit to an inflation index. Dikshit said this would ensure automatic benefit to people in proportion to the rise in prices. He also suggested that senior citizens who had no male heir should not be required to pay income tax.
Vijay Krishna of the Rashtriya Janata Dal, which is part of the ruling coalition, warned the finance minister that the government would have to pay the price if it failed to bring down prices of essential goods. Krishna said people in rural areas didn’t understand 9% plus growth rates, but felt the burden of the rising tomato and potato prices.
The Biju Janata Dal’s Bhartruhari Mahtab also spoke about the impact of rising prices on family budgets, as did the BJP’s Vijayendra Pal Singh and Satyanarayan Jatiya, among others.
India’s inflation rate was unchanged in the week ended 14 April at 6.09%, indicating prices may have peaked as a result of higher borrowing costs and import tax cuts.
The discussion is expected to conclude with the finance minister’s reply on Thursday, when the Lower House meets after a two-day break. This will be the third and the final stage of the passage of Budget 2007-08, which began with the introduction of the Bill on 28 February and was followed by the passing of the Demands for Grants on 16 March.