Modi promises relook at taxation system

'The present taxation system is a burden on common man. There is a need to reform it'

Bharatiya Janata Party (BJP)’s prime ministerial candidate Narendra Modi on Sunday promised a review and reform of the taxation system in the country, saying the existing structure was a burden on the common man.     

“The present taxation system is a burden on the common man. There is a need to reform it and and introduce a new system. It is the need of the time,” Modi said at an event organised by Baba Ramdev, who had demanded abolition of all kinds of taxes and pitched for a single tax in the form of “Banking Transaction Tax” if the Modi becomes prime minister.     

Modi’s remarks assume significance, as the BJP has been talking about abolition of taxes in its internal meetings in the past as well. Former BJP chief Nitin Gadkari had last month said he was contemplating incorporating a proposal to abolish income, sales and excise taxes in the vision document of his party.

Ramdev had also said that once Modi succeeds in coming to power, he should also declare the black money being held by Indians in foreign banks to be national wealth and bring it back and also set up a National Farmer Income Commission. Modi, as well as BJP President Rajnath Singh, and Leader of Opposition in Rajya Sabha Arun Jaitley expressed support for the proposals saying the party would examine them in all seriousness.

“The expectation and hope, which Baba Ramdev has put in the BJP and me personally, we will try our best to live up to that...My party leaders and experts have recently met and considered the issue for over three hours. Some problems may appear in the first sight but we will have a look at it and find new solutions,” he said.

If intentions are right, solutions can be found for all problems, Modi emphasised. Excessive taxes, Jaitley said, also cause a rise in black money, as people stash away money illegally to evade levies.     

He said the life of the common man had become all about paying taxes since his birth to death, listing out numerous taxes levied on using road to house, service, electricity, water besides income tax.     

“Whatever a man earns through his hard work, he can finally keep only a small fraction of it and the rest goes out... There is a dire need to simplify the tax regime, to rationalise it,” he said, adding he had come to appreciate points made by Ramdev and his aides following his long interactions with them over the years.     

The BJP president also seconded the yoga guru's demand, saying there was a need for reform. This alternative of transaction tax is very good. We will consider it and do the best we can".     

Modi blamed the wrong policies of the UPA government for economic woes, saying it had resulted in the decline of manufacturing industry, which required an immediate boost, if the economy was to recover.     

He said “policy paralysis” had resulted in lack of coal for power industry despite India having vast reserves of it. “Power projects have stalled, forcing us to import steel as industrialists cannot manufacture it here in the absence of electricity even though we have plenty of iron ore,” he said.     

He also spoke about recent cases of gold smuggling, invoking decades of 60s and 70s when it was rampant and caused the rise of underworld.     

“Even sand is being smuggled these days. We are talking about corruption. State needs progressive policy drive and its execution with transparency. It will remove corruption,” he said.