| Singh: There goes the net
New Delhi, March 3: The field is levelling out: there’s a strong possibility that wireless in local loop (WiLL) phones may be brought within the ambit of the one-by-six scheme for income tax assessment.
Under the scheme, anyone who possesses a house, a cellphone, a car, a club membership, a credit card and travels abroad has to mandatorily file a tax return.
Finance minister Jaswant Singh today indicated that the government would review the possibility of bringing WiLL phones within the ambit of the one-by-six criteria. Two years ago, fixed-line basic phones were part of the criteria; but later this was amended to remove fixed-line phones but include cellphones.
Limited mobility players like BSNL, Reliance and Tata Teleservices hold basic telephony licences and have, therefore, managed to escape the rigours of the I-T scheme.
“We will look into the gamut of the one-by-six scheme. I wish I had a mobile phone for which I would not have to come under the one-by-six scheme,” said Singh indicating his ignorance about such an anomaly. Singh was addressing the national council meeting organised by the Confederation of Indian Industry (CII) here today.
“Let us see what the government really wants to do with the issue... we will react accordingly,” said a Reliance spokesperson.
The finance minister said he would re-examine the insurance industry’s demand to lower the paid-up capital requirement for starting a health insurance company.
“The time has come to re-examine this Rs 100-crore limit. But the problem is if we reduce the limit, it can be misused,” he said.
The finance minister said he was open to the idea of providing regional or metro-specific licences to health insurers who could not afford to stump up Rs 100 crore as capital.
When Max India chairman Analjit Singh made the proposal, Singh said, “That's an innovative proposal. We can kick the ball around on that one. I assure you that we will look into that.”
Currently, the Insurance Regulatory Development Authority (IRDA) has fixed the minimum paid-up capital for an insurance company (providing life insurance, non-life insurance and health insurance) at Rs 100 crore.
However, industry has been demanding that the capital requirement be scaled back to a reasonable level but the regulator has refused to relent.
Some of the committed players and non-government organisations like SEWA are willing to enter the health insurance sector but have been deterred by the entry limit.
Talking about the proposal to restructure the debt of the Centre and the state, Singh said approximately Rs 1,20,000 crore of central and state debt would be restructured.
The government was also committed to fiscal prudence and had devised a cash management scheme to control spending by the ministries. This will certainly have a positive impact on the fiscal deficit which has been pegged at 5.6 per cent for 2003-04, he said.
Singh added that the government planned to introduce a constitutional amendment Bill in Parliament that would allow service tax to be shared between the Centre and state governments.
The finance minister stressed that though the government has curtailed expenditure to the tune of Rs 6,000 crore and introduced ‘cash management’ system in major spending ministries, it could not spend more than it earned. Singh admitting that fiscal deficit remained a matter of great concern.
The buyback of high-cost securities worth Rs 40,000 crore from banks would address the increasing non-performing assets in the banking sector, while the debt restructuring scheme would enable states to save up to Rs 83,000 crore, Singh said.
In order to improve India’s revenue share, he said, “I am endeavouring to move from a coercive system to a green-channel tax system based on the trust of the citizens.”
Singh said he would ask the states to keep a lower tax rate in order to enable faster growth rate in the services sector that constitutes almost 48 per cent of the country's gross domestic product.