Sinha, however, sought to pacify the alliance partners by referring thewhole issue of subsidy to the Expenditure Commission which would submit itsreport in three months.

Soon after the passage of the Finance Bill 2000 by the Lok Sabha onThursday, Sinha told reporters that newly-constituted commission was beingasked to submit its report within a limited timeframe to ensure that maximumbenefit of food and fertiliser subsidy reached the farmers and poor.

The Lok Sabha passed the Finance Bill 2000 amidst noisy walkout by theopposition parties over the refusal of the finance minister to yield totheir demand for rollback of increase in prices of urea, foodgrains and LPG.Sinha also blamed the media for creating a "hype" on the rollback ofincrease in prices. "More than the BJP allies and other parties, mediacreated a hype about the rollback. Every day there was speculation about theissue," he said and quipped "how long will we keep flogging the issue."

Asked if he would take steps to discipline the stock market after termingits behaviour as "silly and irresponsible", Sinha said this was left to themarket regulator Sebi. "I don't have to direct Sebi for this," he said.He said he was not the finance minister of the Bombay Stock Exchange. At thesame time, no finance minister can ignore the stock markets. He said thebehaviour of the BSE had only do with rumours, and not with fundamentals ofthe economy or the performance of companies. This behaviour "is silly", hesaid. The finance minister also said that the revenue impact of theamendments to direct and indirect taxes would be minimal.

Earlier, replying to the debate on Finance Bill in Lok Sabha, Sinha saidthat one positive factor was an improvement in the ratio between direct andindirect taxes, which had gone up to 33:65 in 1999-2000 from 19:78 in1991-92. This was the result of the conscious policies being pursued by thegovernment.

Credit was also due to the BJP-led rule, for simplifying and rationalisingcentral excise and customs. At present about 86 per cent of the totalrevenue was under one single rate of Cenvat.

Responding to the opposition concern over mounting tax arrears, he saidthese were not accumulated in just two years. Due to the efforts of hisministry, the rate of increase had been arrested.

On the alleged misuse of double taxation avoidance treaty with Mauritius, hesaid the Government would ensure tax compliance from multinationalsoperating in India but would not question the resident certificates given byMauritius to overseas companies for exemption of taxes. He, however, saidthat government would honour the resident certificates given by theMauritius authorities to offshore companies in accordance with the doubletaxation avoidance treaty signed between the two countries in 1983.

Sinha said the problem had arisen owing to simultaneous development ofMauritius changing its laws in 1992 to permit offshore funds to operate fromthe country and opening up of the Indian market in 1993 for foreigninstitutional investors.

He further said, "I am not soft on multinationals. We have caught leadingMNCs who were not paying taxes at sources," and added government hadcollected Rs 600 crore as taxes from these companies last year.