M A I N   N E W S

Surcharge just the beginning
Fresh dose of taxes to follow: PM
Tribune News Service

NEW DELHI, Feb 2 — The imposition of 2 per cent 'earthquake' surcharge on income tax and corporate tax is likely to be followed by a fresh dose of moderate taxes, the Prime Minister, Mr Atal Behari Vajpayee, indicated here today.

The new surcharge, that would fetch the government around Rs 1,300 crore, was not enough keeping in view the magnitude of the devastation in Gujarat, the Prime Minister said after releasing a special issue of the Urdu magazine “Qayadat”.

Mr Vajpayee, however, clarified that “no heavy taxes will be imposed”. The government would also devise other ways to mobilise resources to carry out the massive reconstruction and rehabilitation work, he added.

Declining to comment on how much funds were needed for relief work in Gujarat, the Prime Minister said the decision to impose surcharge had been taken to share the grief of the quake-stricken people of Gujarat. He appealed to people to contribute generously to help the victims.

He said the government was formulating measures to ensure safety of buildings in the national capital to make them earthquake-resistant.

The Union Finance Minister, Mr Yashwant Sinha, who is in the midst of preparing the Budget proposals for 2001-2002 remained mum on the Prime Minister’s disclosure.

He declined to comment on any budgetary measures that were being contemplated to meet the situation arising from the natural calamity.

Meanwhile, the government’s decision to impose 2 per cent surcharge on income tax and corporate tax has received widespread approval from the public and corporates.

“The industry supports the levy in this hour of crisis”, said Mr Shekhar Bajaj, President of the Associated Chambers of Commerce and Industry of India (ASSOCHAM).

The general opinion among the salaried class was that the levy was inevitable. They, however, wanted that the funds should reach the targeted areas.

As for the government it was only following the recommendations of the 11th Finance Commission which had said resources for natural calamities should be raised through surcharge.

Mr Bajaj said the government must effectively monitor the deployment of mobilised funds so that adequate relief was passed on to the earthquake-hit people.

He felt the government should utilise the expertise of chambers, private sector and NGOs to accomplish the gigantic task of rehabilitation.

The imposition of the surcharge levied last night was only marginal in real terms but when added to the earlier surcharge of 10 per cent for income between Rs 60,000 and Rs 1,50,000 and 15 per cent for income exceeding Rs 1,50,000 pushed up the tax rates.

The effective rate of income tax for Rs 60,000 to Rs 1.50 lakh would be 22.4 per cent instead of 22 per cent and for income above Rs 1,50,000, the effective rate of tax would be 35.1 per cent instead of 34.5 per cent. The effective rates for corporate tax would be 39.55 per cent.

The corporates had earlier been paying 11 per cent surcharge earlier.

The imposition of the surcharge at this time of the year would enable the government to realise higher taxes for the entire financial year. In other words, for those people whose tax was deducted at source the entire surcharge would be collected in the next two months.

The Congress today sought an assurance from the Centre that the money to be mopped up through the surcharge would be “fully and effectively utilised.”

Congress spokesman Sunil Shastri alleged here that there was lack of coordination in the relief and rescue operations being carried out in Gujarat at the state government level. Mr Shastri offered the party’s cooperation to face the task of rehabilitation. The AICC relief committee had been expanded to include all office-bearers of the AICC. A team of Congress leaders was going to Gujarat. 

Musharraf phones Vajpayee
Tribune News Service

NEW DELHI, Feb 2 — There was an apparent thaw in the Indo-Pakistan ties when Pakistan Chief Executive Gen Pervez Musharraf and Prime Minister Atal Behari today spoke to each other on telephone , sharing their grief on the Gujarat quake tragedy.

General Musharraf took the initiative and called up Mr Vajpayee and expressed sympathies over the great loss of lives and wide-spread devastation caused by the earthquake in Gujarat.

During the five-minute talk in Hindustani, Mr Vajpayee assured General Musharraf of India’s continuing desire to build good neighbourly relations with Pakistan.

Pakistan had sent two plane-loads of relief material like blankets and medicines for the quake victims and another plane is likely to come tomorrow.

Earlier in the day, expressing gratitude to Pakistan for sending relief assistance to quake-hit Gujarat, the Prime Minister had hinted about the telephonic talk when he said: “ There may be a talk with General Musharraf on phone today.”

“Go along this way. Out of grief and pain, maybe there is a way out. Possibly again there is togetherness, and something emerges out of it”, Mr Vajpayee said pointing out that “when difficulties are shared, then gravity is lessened and pain gets diminished”.

Talking to newspersons after releasing a Hindi and Urdu weekly “Secular Qayadat”, Mr Vajpayee said: “It is at the time of distress that people come together and share grief”.

Asked about the resumption of the stalled Indo-Pak talks, the Prime Minister reiterated that India had made it clear that the talks could start only after a conducive atmosphere was created in Jammu and Kashmir.

“We have always favoured talks for which the right atmosphere has to be created. Violence, killings and terrorism must stop and the climate should be such that fruitful and meaningful parleys can take place”, Mr Vajpayee said.

Terming media reports about New Delhi refusing aid for quake victims as baseless , Mr Vajpayee said: “I am very happy that Pakistan is sending relief material. More relief is expected from that country”.

Asked as to what exactly would he talk to the military ruler across the borders, Mr Vajpayee said: “at this juncture, it will be only Gujarat”. General Musharraf wanted to express condolence over the death and devastation in Gujarat, he added.

“If any leadership works, it will be nothing else but secular leadership. And if it not so, the leadership will be confined to only a certain limit and cannot have a wide acceptance”, the Prime Minister said, expressing a disapproval of vote bank politics. He said: “vote bank politics should be up to a certain limit only”.

Pointing out that “reality is different from myth”, Mr Vajpayee said fundamentalists should be kept under check and went on to add in his typical humorous way that his remarks would be again projected as “ek aur mukhota (another mask) ''.

Referring to his conversation with the former US President, Mr Bill Clinton who had sought his suggestion about a meeting that he was going to have with Indians settled in the USA, this morning, Mr Vajpayee said it would be a good idea if every well- off Indian in the USA adopted a village for reconstruction and rehabilitation which had been divested.