Govt to raise taxes; promises growth

Committing to push economic reforms with a human face to attain 7-8 per cent economic growth, the ruling United Progressive Alliance on Thursday sought a cess on central tax to fund education and a special scheme to tap black money.

Unveiling the common minimum programme, Prime Minister Manmohan Singh today outlined the broad contours of the Union Budget for 2004-05, promising stable tax rates, far reaching tax reforms including the value-added tax.

The UPA government also pledged to wipe off the revenue deficit of the Centre by 2009 for releasing more funds for public investment to push up growth.

Highlights

• Economic growth target of 7-8 per cent per year
• Legal guarantee for 100 days of employment
• Cess on all central taxes
• Divestment ministry to be scrapped
• Profit-making PSUs not be privatised; Navratnas to be retained
• FDI to be encouraged in infrastructure, high-technology and exports
• Labour laws to be re-examined
• VAT to be introduced
• Special schemes to unearth black money
• SEBI to be further strengthened
• Integrated energy policy; energy security to be enhanced
• A National Manufacturing Competitiveness Council to be set up
• Strengthening of public distribution system
• Review of Electricity Act, 2003
• Protect national interest of farmers at WTO; play proactive role in G-20
• Trade and investment with China to be enhanced

He said the Congress-led coalition government will carry forward the reforms and lay special emphasis on agriculture, infrastructure and SSI sectors with the objective of pushing up employment-oriented growth.

Assuring India Inc of measures to boost industrial growth, Singh said the new government will encourage FDI in infrastructure, hi-tech sectors and exports.

Singh virtually reversed the privatisation policy of NDA government by mandating that no profit-making PSU will "normally" be divested, and scrapped the divestment ministry by merging the department with the finance ministry.

The prime minister said: "All subsidies will be targeted sharply at the poor and the truely needy like small and marginal farmers, and urban poor."

"The UPA government will not cut deficits by reducing or curtailing growth of investment and development outlays," Singh said, adding a detailed roadmap for accomplishing this will be unveiled in Parliament within 90 days.