Yashwant Sinha hints at a hard budget, says VDIS declarants won't be targeted -Saturday, April 11, 1998

Saturday, April 11, 1998

Yashwant Sinha hints at a hard budget, says VDIS declarants won't be targeted

Vikant Sahay

PATNA, April 10: Finance minister Yashwant Sinha has hinted at the possibility of a tough union budget, scheduled for some time in May or June.Speaking to The Financial Express, Sinha declined to disclose what specifically he had in mind, but said that he fully agreed with prime minister Atal Behari Vajpayee's statement in this regard some time ago. Vajpayee had said that some tough steps would have to be taken to set the economy rolling again, and Sinha said "we will show it in the budget."

Sinha also seemed to suggest that he would be following his predecessor's attempts to widen the tax base. "We will ensure that all (those) eligible do pay their taxes". At the same time, he said he would respect the promises made by the previous government with regard to the confidentiality of VDIS declarations and not target them for further revenues. "We have no intention to target declarants," he stressed. The finance minister indicated that measures to strengthen the anti-dumping laws would be needed. He said theanti-dumping "provisions should be used effectively by India wherever there is a case for imposing such duties."

While there were instances where such duties have been imposed, Sinha said the "problem is that our procedures are somewhat cumbersome. I have discussed it with my colleagues in the commerce ministry and we are keen that the procedures are streamlined so that we can respond to those situations and impose anti-dumping duties whenever they are called for." Among other things, Sinha said he would be looking into the role of financial institutional nominees on the boards of companies, study measures to prevent frauds in non-banking financial companies and strongly take up the cause of developing nations before the World Trade Organisation (WTO).

Sinha, who will be leaving for Washington to attend the spring summit of the World Bank and the International Monetary Fund (IMF) on Saturday, also said that he would try his best to woo foreign investment in his interaction with businessmen in the US andUK. "I propose to meet foreigners who are interested in investing in India. I will meet them in Washington, New York and London to invite them to invest here."

When asked about his party's conflicting views on foreign investment, Sinha said that "when we talk about potato chips we mean non-priority areas and, on the other hand, computer chips signifies high-technology development areas." Asked Sinha: "Can't we survive without Kentucky Fried Chicken or McDonald's hamburger? We have non-vegetarian dishes here which are famous all over the world."

The finance minister went on to state that "we cannot create islands of high and conspicuous consumption in our country which is surrounded by a sea of poverty."

He reiterated that the government would soon define priority and non-priority areas to avoid any confusion. He said, "we will invite foreign investment in high-technology areas, export production, infrastructure development."

At the fund-bank summit, Sinha said he would "particularly discuss the recentfinancial developments in south-east Asia where the currencies have been devalued by 40 per cent to 80 per cent." These countries have approached the IMF and the World Bank for huge loans.

Sinha said that he would be meeting the treasury secretary of the US to discuss the issue of regulating the movement of international capital.

As far as the impact of the south-east Asian financial crisis on India was concerned, Sinha said since these economies were coming out of the crisis phase, "there is no reason why India should be concerned." Speaking about the issue of foreigners patenting traditional Indian products, Sinha said "we had earlier opposed the (IPR) accord when it was signed by the Narasimha Rao government." However, he added that that the government would ensure that the country did not suffer on account of such decisions.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.