Finance minister Yashwant Sinha today held out the hope that some budget provisions like the depreciation allowance could be modified in the Finance Bill, but urged industry to eschew any quick-fix solutions to revive the economy.
Sinha told a post-budget conference organised by the Federation of Indian Chambers of Commerce and Industry (Ficci) that he taxed dividend on the same principle as export income, and said it was only fair that high net-worth individuals should pay tax on dividend income when salaried employees had to pay income tax.
The minister told industry captains the impact of any largesse would have dissipated without producing a feel-good factor and worsened the situation. He claimed the government had not withdrawn any tax benefit, except in direct taxes. He also said the lowering of customs duty was in accordance with the long-run schedule and added that industry should factor in the two-tier customs duty at the highest of 20 per cent into their calculations.
He said he had tried to find a compromise between the needs of reviving industry and not stretching the fiscal deficit in the budget for 2002-03. In spite of a revenue give-away of more than Rs 16,000 crore in the last budget, there had been no industrial revival to bridge the gap, he added.
He, however, said the Centre would consider the demand for including plant modernisation within the scope of the 15 per cent depreciation allowance. An investment allowance, as demanded by industry, would have accrued as reserves. This will not be beneficial.
The minister said he had gone against his own proposal of a flat 16 per cent central value-added tax as textiles excise, because
