Dr Rangarajan's proposal to put a surcharge
on the higher income brackets progressively is a worthy suggestion at the right time; this can be at the threshold of
Rs.10lakhs-20lakhs: 3%; >Rs.20lakhs-30lakhs: 5%; >Rs.30lakhs: 10%.
Another progressive measure could be raising the share
transaction tax above the threshold level of transactions, say above Rs.2lakhs
where the small investor gets incentive to invest and the large investor pays
to the exchequer a STT of 1% instead of the present nominal STT. The third
measure to reduce fiscal burden would be doing away with the Parliamentarians
and legislators getting Rs.5crores to spend in their constituencies through the
Constituency Development Fund as most of such spending has been ill-spent as
revealed by a number of studies. The fourth area could be to reduce the
personal security provided to the legislators only for the Z category. The
fifth area could be taxing the Parliamentarians and legislators for
non-attendance and for the non-participation in the various standing committees
of the Government. These would certainly reduce the fiscal burden of the
Government.
The other most important area where subsidies have to be
re-engineered is farm sector: Restrict subsidies to the small and marginal
farmers so far as input subsidies are concerned. Provide a market stabilisation
fund and extend support whenever the prices for farm products fall below the
cost of production plus a minimum profit for the farmer. The recommendations of
CACP could hold good for this purpose.
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