Cong moots luxury taxes, direct subsidy transfer to the poor

Amid concerns over rising food prices, many Congress party members mooted proposals for taxes on lavish expenditure, at the Finance Minister’s pre-budget meeting with senior colleagues.

An overwhelming majority of the 50 Congress leaders who attended the meeting on Tuesday urged the minister to address the issue of taxes on lavish expenditure and display of wealth, while raising voices against the massive price inflation (especially food inflation) in his budget. Suggestions included direct transfer of subsidy money to the poor as mooted by Maharashtra Chief Minister Prithviraj Chavan.

Mukherjee admitted that inflation was a major area of concern but refused to discuss the issue at length. On several occasions, Mukherjee cited “shortage of fund” when leaders from across the country demanded a fare share of projects in their states.

Chavan suggested the amount of subsidy be transferred directly to the beneficiaries to provide them an opportunity to buy food from the open market and not depend on the Public Distribution System. The suggestion by the Maharashtra CM comes after the Finance Ministry formed a group headed by Nandan Nilekani to evolve a mechanism to provide kerosene, cooking gas and fertiliser subsidy to the poor by direct cash transfers. Chavan wants its scope to be expanded to the BPL population for food articles.

While Mukherjee preferred not to have discussions on price rise, inflation continued to be the main theme with his party colleagues. V Hanumantha Rao suggested a mechanism to rein in state governments against changing land use patterns. He argued that agricultural land was being diverted for real estate purposes, which are taking a toll on food prices.

The meeting was not attended by Congress President Sonia Gandhi and General Secretary Rahul Gandhi. Suggestions poured in not only from central leaders but also state unit chiefs, heads of frontal organisations and other office bearers.

Mukherjee avoided the media after the meeting. Other ministers like Ghulam Nabi Azad and Jairam Ramesh were also present but none of them expressed their views at the meet.