Tax giveaways target BJP's vulnerable votes

The finance ministry's package of concessions in the unprecedented mini-Budget seems to be aimed at those sections of the population, which are considered politically vulnerable for the National Democratic Alliance (NDA) government ahead of early Lok Sabha elections.

The package was cleared at a meeting called by Prime Minister Atal Bihari Vajpayee at his 7, Race Course Road residence this morning, attended by his senior colleagues in the government and the party.

The inputs from various poll surveys, commissioned by the Bharatiya Janata Party (BJP), were used to give the final shape to the package, BJP sources said.

The package was discussed in great detail by Union Finance Minister Jaswant Singh with Deputy Prime Minister L K Advani and BJP chief M Venkaiah Naidu.

The fact that the Prime Minister cleared the proposals is the signal to the party to get ready for elections.

BJP sources said the package was announced a few hours before the National Democratic Alliance (NDA) meeting as the part of the BJP strategy of "carpet bombing" political adversaries before the polls.

With election fever gripping the country, the BJP has neutralised the Swadeshi Jagran Manch (SJP), which has been opposing a reduction in Custom duties to conform to the World Trade Organisations (WTO) guidelines.

SJM convener Mulridhar Rao said though the SJM was opposed to any reduction in duties under the WTO pressure, there would be little scope for the opposition if concessions were targeted at common man.

The finance minister designed the package to bolster the prevailing feel-good factor that stems from the economic recovery, which the BJP has been trying to leverage to its political advantage.

Singh has identified healthcare as a target area and has reduced duties on the life-saving drugs and artificial limbs. This was one of the health ministry's populist schemes, which never materialised because of the finance ministry's reservations.

Similarly, the finance ministry's decision to waive the mandatory provision of filing income-tax returns even for the low-income groups and the exemption to pensioners from filing income-tax returns are intended to convey the message that the government cares for the weaker sections of society.

Politically, the NDA was apprehensive of incurring opposition from senior citizens for reducing interest rates on fixed deposits and bringing pensioners within the tax net.

Similarly, the concessions for non-resident Indians (NRIs) and the civil aviation and power sectors are intended to lay emphasis on the "Shining India" ad campaign and are designed to address the affluent classes.