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Somebody has to bear the cost: Sinha

Finance Minister Yashwant Sinha on Wednesday criticised the industry for double standards, saying it wanted tax relief without bearing the cost of higher fiscal deficit.

"All of us want fiscal deficit to come down and the economy to move forward. I am convinced that everyone wants government to govern firmly with the only qualification that you do it for others, but don't touch me," Sinha said while criticising industry for demanding tax breaks.

Speaking at an Assocham seminar, he said government was incurring higher expenditures for deploying additional troops at the border and maintain a 'strong and firm' stance against the neighbours.

"But nobody was prepared to bear the cost. What kind of patriotism is this? I was dismayed at this attitude of the industry," he said.

He cited editorials supporting him on LPG price hike, but critical on imposition of 10 per cent tax on recipients of dividend income, and said this 'unfortunate attitude' of industry is hardly conducive for raising the tax-to-GDP ratio.

He asked industry to classify import items in order to facilitate smooth transition to a regime of 10 per cent duty for raw materials and 20 per cent on finished products.

Sinha ruled out rollback in direct tax proposals and 0.5 per cent cut in small savings rates but said centre was considering a 'savings scheme' to benefit employees of both public and private sector, especially those opting for a voluntary retirement scheme.

"While removing tax concessions, we have been careful on small wage earners. The reduction in tax concessions will affect only 365,000 taxpayers of 200 million middle class population," Sinha said.

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