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BJP readies diluted tax report

New Delhi, Jan. 18: A committee constituted by the BJP to study the Vijay Kelkar report on taxes is expected to “tread the middle path” on Monday when it is scheduled to submit its observations to party president M. Venkaiah Naidu.

The Kelkar report has several proposals, including one to do away with standard deduction for income-tax, that will affect the salaried if implemented by the government through the coming budget. But most political parties have been more vociferously protesting against a suggestion to tax agriculture income and reduce the exemption ceiling for small-scale units.

The Rajnath Singh committee was set up by the BJP to assess the tax proposals after sharp divisions emerged in the party, which is worried about the impact of the recommendations on the ground as several key states are going to polls this year.

Rajnath, former Uttar Pradesh chief minister, had trashed the Kelkar report initially. BJP sources said today the Rajnath committee would “retain the spirit of the criticism but soften the tone”.

The “consensus” was evolved after signals came from the top that “outright criticism” would reflect badly on the Centre as it was a BJP finance minister who constituted the tax committee and not someone from the Opposition.

A section of the government construed the criticism of the Kelkar proposals as an “attack” on finance minister Jaswant Singh after members freely aired their views in the BJP national executive held on December 23 and 24.

In the session, deputy Prime Minister L.K. Advani tried to defuse the situation by clarifying that a final view would be taken only after getting feedback from various sections.

But once a committee member rubbished the Kelkar recommendations as “fit for the garbage can” on a television channel, many in the party felt “enough was enough” and that efforts should be made to steer the in-house committee through the “middle path”, especially after the finance minister made it clear how “hurt” he felt.

Jaswant, the sources said, maintained that the BJP should either accept the entire report as a “package” or reject it in toto.

The BJP sources, however, maintained that “mollifying” Jaswant would not mean “compromising” with its views on the Kelkar committee.

“Our report will continue to express our commitment to protect the interests of farmers, the salaried, women, senior citizens and poor students,” said a committee member.

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