India Inc may have to pay for SC uplift

The Union government is thinking of levying one more cess on incomes of corporate India to help them discharge their duties towards the people belonging to the scheduled casts (SC) and the scheduled tribes (ST).

However, instead of paying cess to the government, the corporate houses will this time pay directly to deserving SC and ST students as scholarships or soft loans, or give funds directly to the educational institutes to create better infrastructure for SC and ST students.

However, a senior functionary from the Prime Minister's Office (PMO) said, "This is a just an idea among many others discussed by the top functionaries of the government and not the formal proposal yet".

Indicating that it may not be part of union budget for 2007-8, sources said," the concept is in infancy and we need to go miles before it sees the light of the day, and before taking any step government wants to take all prominent business chambers and business houses in confidence".

So far corporate sector has opposed to any reservation in the private sector but they are assuring to take affirmative action by providing SCs and STs qualitative education which will allow them to compete with other candidates for jobs in private sector.

It has also agreed to provide funds to create entrepreneur class from among SCs and STs, and by levying a cess, the government will just try to formalise these arrangements, he added.

They also indicated that Prime Minister Manmohan Singh and Congress president and United Progressive Alliance (UPA) chairperson Sonia Gandhi are in favour of the proposal to levy cess on corporate sector.

It may be recalled that the government had imposed 2 per cent surcharge on service tax as education cess and also on the income tax to finance its ambitious Sarva Shiksha Abhiyan for the spread of primary education.

In the case of corporate tax payees who also pay corporate surcharge, total surcharge works out to be around 14.5 per cent of the income tax they pay, and there is constant demand from the corporate houses to remove this corporate surcharge.