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Kargil tax: President gives his nod

Gurdip Singh in New Delhi

President K R Naryanan is understood to have given his verbal assent to a government proposal that aims at raising additional tax revenue for meeting the expenditure arising out of the Kargil operations.

A proposal in this regard may now come up before the Union Cabinet meeting next Tuesday, highly placed sources said.

Finance Minister Yashwant Sinha had a half-an-hour-long meeting with Narayanan on July 13 to apprise him of the necessity to impose a mid-term tax to finance the cost of the Kargil operations.

The sources said at least Rs 20 billion was required to be mopped up for this purpose.

The figure in some press reports of Rs 8 billion was too low they said adding that such an amount could be managed through deficit financing alone. ''If only this much resources are required then it must be a very cheap war,'' they added.

The sources, however, said that the modalities for imposing the tax were still being worked out. The tax could be a wide ranging one or only under some heads -- corporate tax, personal income tax, excise or customs.

The sources, however, admitted that there was an opinion in the ruling party that the cess, especially in the form of taxes, if levied before the elections, could be detrimental to the party's chances in the forthcoming elections.

The sources said it was imperative that the consent of the president be taken before a concrete and comprehensive proposal is mooted because the government is a caretaker one.

The sources said the tax proposals will have to be enforced through an ordinance.

The Kargil Crisis

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