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Budget '07-'08: PC's post-Budget interview

Chidambaram explains the finer nuances of the Union Budget 2007-08.

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• Budget '07-'08: PC's post-Budget interview

Keywords: Union Budget 2008, specials

Chidambaram: We got the Dr Rangarajan Committee report, only seven days before the Budget and seven days is too short a period to decide such a complex issue. Therefore I have said, we have concluded our consultation with stakeholders. We are ready, the Rangarajan Committee report is the latest that we have received and I have asked everyone to join me in forging a consensus, so the discussion will start now.

Raghav: When do you think you will be able to seriously look and announce a prescription based on the Rangarajan Committee report?

Chidambaram: I would not have announced it, the Petroleum Minister will have to announce it. For the government, we should give ourselves about three months for it.

Raghav: So about 12 weeks is the target?

Chidambaram: I hope so.

Raghav: Excise. How do you tackle that problem, the lack of buoyancy in those taxes?

Chidambaram: I believe the bulk of it can be explained by drawback since exports are booming, all that excise paid is getting drawn back. Since area based exemptions and specific industry exemptions have also enlarged over the last few years, excise has been drawn back or excise has been refunded or excise has not been collected. I am concerned about excise.

I have put together a system by which top people are reporting it online every week but we are trying to fix it. But the explanations that I have received so far is that export area based exemptions and industry based exemptions are leading to a large amount of drawback in refunds.

Raghav: Is there any chance of looking at those exemptions with a little bit more tough stance?

Chidambaram: We have removed some exemptions and I am going to put many more on the website, which I have referred to in my speech. Once we get the feedback, we will knock out many of those exemptions.

Raghav: MAT. You said that it is not a back door entry of long-term capital gains tax on equities. But for the corporate you have actually brought back the long-term capital gains tax?