NEW DELHI, Jan 15 (PTI): Ruling out any hike in tax rates in the coming budget, Indian Finance Minister P Chidambaram has said the United Progressive Alliance (UPA) government was moving towards consensus with Left parties to open up the retail sector and promised to divest a small portion of government equity in three or four non-Navratna PSUs by March 31.
"I think the tax rates are reasonable... I am not going to increase any rate. I am going to improve the tax administration," he said, while emphasising that the retail sector would be opened up to FDI and the dialogue with Left parties in this regard was on course.
"I can't promise a date but we will begin to see consensus on opening up the retail sector in a selective manner. The consensus is in favour of opening up retail sector and the question is in which part of retail sector will you allow it (FDI)," Chidambaram told a news channel.
"FDI will come. It is already coming in cash and carry sector. It has come in the wholesale sector. Retail is the next step. It will come... We are looking at several options. I think the Commerce Minister (Kamal Nath) has spoken about it. Single brand is one option. Metro cities is another option. These options are being discussed."
The Indian government needed to find a large number of jobs in farm, non- farm, in manufacturing sector and in the low-endeavour services sector, he said emphasising "that is why we are arguing for opening up the retail sector."
However, he made it clear he was not promising anything at this stage on retail in FDI and that he would persuade Left Parties on this issue.
Elaborating on taxes, Chidambaram said the effective tax rates were low in this country because of numerous exemptions. The UPA government has given tax breaks and imposed new taxes. But overall this government has left more mony in the pockets of taxpayers and consumers. "There will always be more money in the pockets of consumers."
He discounted the view that the experience of newly introduced Fringe Benefit Tax was "traumatic" and emphasised that the FBT was here to stay even though it could be simplified by revisiting certain glitches.
On disinvestment, Chidambaram said that his government has reached an agreement with Left Parties that cash-rich Navratna PSUs would be kept out. In non-Navratnas, government could divest small portions of equity to raise funds and put it in the National Investment Fund.
He declined to give names of the PSUs that are likely to divested this year, saying "We don't announce these decisions. These are price sensitive decisions."
Chidambaram did not subscribe to the view that the Left Parties were against pushing reforms, particularly opening up of the retail sector and disinvestment.