New Delhi, February 2
The seventh note of the ruling NDA’s “sop opera” will be played tomorrow noon as Finance Minister Jaswant Singh unravels his government’s Vote-on-Account and the Interim Budget in Parliament, three days before the expected dissolution of the Lok Sabha.

Mr Jaswant Singh’s please-all exercise tomorrow will be the seventh time since January 8 when the government will be making pre-election announcements after major concessions in indirect taxes (on January 8); a mini-budget the next day “addressing life-time concerns of citizens” in the words of Mr Jaswant Singh himself; raising FDI caps on petroleum and banking sector and setting up agriculture call centres (January 15); indirect tax cuts for computer devices (January 16); mini-Exim policy (January 28); and Interim Rail Budget (January 30).

It will not be a one-line Vote-on-Account by the Finance Minister as he would be making a longish speech, showering sops on salaried class, farming community and rural and urban consumers.

The Finance Minister is expected to propose concessions which will result in the reduction of prices of cars, tyres and air-conditioners and announce a major relief regarding the income tax exemption limit, which is presently pegged at a paltry Rs 60,000.

Mr Jaswant Singh will have to walk a tightrope on this score as pressure mounts from within the ruling political establishment to enhance the income tax exemption limit to Rs 1 lakh, a suggestion which is good politics but bad economics. Prudent economics and conventions, however, do suggest that the government should stay away from tinkering with the existing tax rates through a Vote-on-Account.

Government sources said today that the Finance Minister could instead decide on enhancing the standard deduction limit while keeping the exemption limit unchanged. An increased standard deduction would bring down the effective tax liability for assessees even without any change in the exemption limit.

Besides, the government is also examining the financial consequences of the merging the dearness allowances with the basic salary for Central Government employees. The move, as recommended by the Fifth Pay Commission, will have major cascading effects as cash-strapped state-government will have to follow suit.

It is learnt that Chief Ministers of various states have already contacted the Finance Minister and suggested against merging the DA with the basic salary. The sources said this included Chief Ministers of several BJP-ruled states such as Ms Vasundhara Raje Scindia of Rajasthan who was against any such move as it would have an adverse impact on the precarious finances of state governments.

However, a sizeable section of BJP parliamentarians is holding the opposite line of opinion and argued that freebies to government employees were of immense significance as they constituted a critical mass of the party’s vote-bank.

The agricultural sector, however, is almost certain to be one of the major focal points of Mr Jaswant Singh’s announcements in the Interim Budget. He has long been talking about ushering in a “second green revolution” to pitchfork the rural economy into a high-growth trajectory.

Among other things, he is expected to unveil a package for strengthening the cooperative sector in the rural areas. Agriculture Minister Rajnath Singh has proposed a Rs 14,500 crore package for the same.