NEW DELHI: Despite not initiating big ticket reforms, Finance Minister Pranab Mukherjee laid the roadmap for implementation of the Direct Tax Code (DTC) by April 1, 2012.
On Goods Service Tax (GST), the Finance Minister said the decisions on have to be taken in concert with states, and proposed to introduce the Constitution Amendment Bill in the current session of Parliament.
“Efforts to implement both DTC and GST will bring tax stability and will revolutionise the tax system,” said D H Pai Panandiker, president of RPG Foundation.
Maintaining the momentum on disinvestment, the Finance Minister also announced `40,000 crore target in 2011-12. In the current financial year, the Centre had realised `22,000 crore out of disinvestment against the target of `40,000 crore.
To address the issue of leakage in subsidies given to people below the poverty line, Finance Minister Mukherjee said the government would move towards direct transfer of cash subsidy in a phased manner.
A task force headed by Nandan Nilekani is expected to submit the interim report by June 2011 and the system will be in place by March 2012.
Recalling several proposed legislation like insurance laws (amendment) bill 2008, Banking Laws Amendment Bill 2011, Life Insurance Amendment Corporation (Amendment) Bill 2009, Mukherjee said the Financial Sector Legislative Reforms Commission under Justice B N Srikrishna would rewrite and streamline the financial sector laws over the next 24 months.
To woo the foreign investors, Mukherjee raised the limit for Foreign Institutional Investors (FIIs) for investment in corporate bonds with residual maturity of over five years issued by companies in infrastructure sector was being raised by $20 billion to $25 billion.
This would raise the total limit available to FIIs for investment in corporate bonds to $40 billion; he said adding they would be permitted to invest in SEBI registered mutual funds for equity schemes. On the Foreign Direct Investment (FDI) policy, Mukherjee said discussions were underway for further liberalisation.