Shome resigns as Adviser to Finance Minister

New Delhi, Dec 28 (UNI) Two months ahead of the Budget, Dr Parthasarthi Shome, Adviser to Finance Minister P Chidambaram, has resigned.

According to sources, Dr Shome has resigned on personal grounds and would quit the Finance Ministry in the first week of January.

Dr Shome is a specialist in Public Finance and an economist of international repute.

He was instrumental in ushering key economic reforms, including the nation-wide Value Added Tax.

During his tenure two controversial taxes were introduced--the Fringe Benefit Tax (FBT) and Banking Cash Transactions Tax (BCCT).

However, they were opposed by industry and the business community tooth and nail, but the Ministry refused to take them back.

With his leaving the complexion of the team that would formulate the Budget 2008-09, would be entirely new from the one in the last Budget.

Sometime back Chief Economic Advisor Ashok Lahiri had left the Ministry for an assignment with the Asia Development Bank, Mr K M Chandrasekhar was shifted from the post of Revenue Secretary to that of Cabinet Secretary and Mr D Subarao replaced Mr Adarash Kishore as Finance Secretary.

Mr P V Bhide is now the Revenue Secretary and Dr Arvind Virmani the Chief Economic Advisor.

Dr Shome could not be contacted for comments.

The tenure of Dr Shome, who was appointed as Adviser to Finance Minister on October 1, 2004, was for three years. His term was, however, recently extended till October 2009.

Mr Shome was co-convenor of the Working Group on Goods and Services Tax, which is to form the basis of future policy on taxation. The government is planning to introduce one GST by 2010.

He is also in the Committee working out the rates of GST.

Mr Shome was also the Finance Ministry's representative in the Empowered Group of State Finance Ministers for VAT, headed by West Bengal Finance Asim Dasgupta. VAT is regarded as the most farreaching tax reform undertaken in the history of Independent India.

His resignation has been accepted.

He is the first Indian to have been awarded Brazil's highest Indian civilian honour--'Commander of the Order of the Southern Cross.' UNI