Sinha told the Lok Sabha that the previous United Front government had increased the 2 per cent SID, introduced in 1996, to 5 per cent last year along with enhancement of foreign travel tax from Rs 300 to Rs 750 through an ordinance in September last year.

"It is not our intention to carry on taxing imports... We will allow this to lapse by March 31, 1999 as scheduled," he said. Sinha said this while responding to the debate on the Finance Amendment Bill (1998) for replacing the ordinance. The Bill was passed by a voice vote.

The finance minister also assured the House that the government expenditure would be contained to the budgetary level and he would not take recourse to taxation through ordinances.

The ordinance wasnecessary as the country faced a extraordinary political situation leading to mid-term elections, and his predecessor could not move Parliament for the purpose, he said.

The ordinance, it might be recalled, was promulgated on April 21, 1997. The then finance minister P Chidambaram could not get it replaced by a bill as there was no winter session and general elections were held. After the Budget was passed, on the recommendations of a committee, the emoluments of the central government employees were further increased putting an additional burden.

The then government, through an ordinance, decided to mop up additional revenue by increasing the special duty on customs from 2 per cent to 5 per cent ad valorem on the imported goods except petroleum products and project imports and raising foreign travel tax to neighbouring countries from Rs 300 to Rs 750 per person.