Week in Review

Budget Sops
Fresh tax sops announced, standard deduction raised

THE finance minister, Yashwant Sinha, raised the standard tax deduction by Rs 5,000 for salaried income up to Rs 3 lakh and doubled the limit for TDS on interest income, slashed customs duty for textiles and its equipment imports, but hiked it on imported cars to protect domestic industry.

The raising of standard deduction limit alone would cost the exchequer Rs 1,000 crore while other changes would be broadly revenue neutral.

Moving the Finance Bill, 2001, in the Lok Sabha, Mr Sinha restored partially the limit of deduction of interest income under Section 80L to Rs 12,000 from Rs 9,000, which was proposed in the Budget. The additional deduction will cover interest rate on government securities.

Even as readymade manufacturers were crying for relief from the 16 per cent excise duty on branded garments, he widened the net to include unbranded garments excluding clothing accessories, raincoats and undergarments to remove “distortions and manipulations”.

Mr Sinha proposed to exempt plastic footwear costing up to Rs 125 per pair from the nominal 4-per cent excise duty.

Keeping in view the difficulties of exporters, he proposed to re-phase the withdrawal provision by taxing export profits to the extent of 30 per cent as against the proposed 40 per cent for the current year. The percentage of their taxable income will increase 50 per cent, 70 per cent and 100 per cent in the next three years instead of 60, 80 and 100 per cent.

Power problems
MSEB pays Rs 134 crore March bill ‘under protest’ to DPC

DESPITE the threat of a possible termination notice hanging on its head, Maharashtra State Electricity Board (MSEB) made a ‘protest payment’ of the Rs 134-crore disputed amount, towards March bill of Rs 146.64 crore to Dabhol Power Company (DPC).

“We have disputed payment of Rs 12.64 crore and it would be now taken up at the disputes resolution forum, of which Enron India managing director K Wade Cline and Krishna Rao are members,” MSEB sources said.
Last week, DPC had dashed off a communication to the government and MSEB that it would not accept ‘protest payments’ anymore.

Stock Scam
JPC on stock market scam set up

HEEDING to the Opposition demand, the government moved a resolution in Parliament on setting up a joint parliamentary committee (JPC) on the stock market scandal.

A 30-member committee was was set up, which included 20 members from the Lok Sabha and 10 members from the Rajya Sabha.

Politics
Jayalalitha’s nominations rejected

IN a severe blow to AIADMK supremo J Jayalalitha’s political fortunes, her nomination papers in all the four constituencies, including Andipatti and Krishnagiri, in the coming Assembly elections in Tamil Nadu were
rejected on Tuesday in view of her conviction in a corruption case.

AIADMK organising secretary A Ponnuswamy announced to his waiting partymen outside the office of the returning officer in Krishnagiri in north west Tamil Nadu that Jayalalitha’s nomination has been rejected by returning officer M Mathiavanan.

In Andipatti constituency in southern Tamil Nadu, which once returned the late MGR, returning officer D Jaya negatived Jayalalitha’s papers.

Jayalalitha’s disqualification comes in view of her conviction in a corruption case and sentence
to more than two years’ imprisonment.

Section 8 of the Representation of the People Act bars people convicted and sentenced to more than two years’ imprisonment from contesting elections.

Ms Jayalalitha pinned her hopes on contesting the elections on a Madras High Court directive
last week that the stay of the sentence against her by the court last year rendered conviction also virtually stayed.