Sources said that finance ministry was considering the demands made by the trade unions in this regard. They said that there was a feeling that since LTC benefited the tourism and the transportation sectors, its suspension should be lifted to boost economic activities in these sectors.
In the Budget for the current financial year, Mr Sinha had imposed a two-year suspension on LTC for government employees as part of his expenditure management agenda. “Facility of LTC to central government employees will be suspended for two years for the remaining part of the four-year block period except for employees, who are entitled to the last LTC before retirement,” Mr Sinha said in his budget speech for 01-02.
Trade unions in their pre-budget meeting with Mr Sinha have stressed that it was not prudent to strip government employees off LTC facility under the pretext of austerity measures. They pointed out that since the perks of Members of Parliament had been raised, there was no justification in keeping the suspension on LTC.
Sources said that with the lifting of suspension on LTC, next budget was also expected to relax norms for taxation of perquisites for the government employees.
An indication towards this was given by Mr Sinha too during his consultations with the trade unions for 02-03 budget. Trade unions have demanded that the government should withdraw extension of tax-net to fringe benefits of the government employees.
It may be noted that the perquisite taxation for the salaried class has been restructured in the current fiscal to bring the fringe benefits paid by the employers, especially private sector and MNCs, under the tax net.