The Finance Minister, Mr P Chidambaram on Tuesday ruled out any quantitative ceiling on home loans and said interest rates would moderate in tandem with inflation. "There is demand for housing loans.. We cannot have quantitative ceilings for housing loans, because there is aspiration (for homes),'' he told PTI. He was responding to a query if there was an effort by the government and the RBI to moderate the growth in housing and consumer loans. "I do not think that it is right to put restr ictions on housing loans. Since there is a rather high growth, it could lead to a bubble. The RBI was right in increasing risk weight and making some regulatory prudential requirements to cool down the sector,'' the Minister said.

He pointed out it was not for the first time that interest rates had gone up. In 1999-2000 and 2000-01 also, interest rates were high. "What you need to look at is the real interest rate. With inflation around 6 per cent, it works out to be only 6 per c ent. When inflation comes down, interest rate will also come down,'' Mr Chidambaram said.

The RBI had taken some policy initiatives to moderate over 30 per cent growth in housing and consumer finance. Some of the leading financial institutions and banks have also reported a fall in disbursal of such loans.

On the subject of taxes touching low ASEAN levels in the country, he said for that the base must become wider and compliance must get better. Asked about his recent statement on lowering tax levels, he said, "All I said was if compliance improves and ta x base gets wider there is scope for reduction. And I added that we must always work on the premise that lower tax rates could nevertheless enhance revenues.'' Asked if tax-payers could expect something in the next budget, he said, "depends on what we f ind is the revenue picture in the first week of February.''

To a question as how close the country was to the ASEAN levels of low taxes, he said on customs the country was "more or less there''. On excise, VAT and service tax, no major changes could be expected till India had a Goods and Services Tax (GST) in pla ce. "So there will be some fine tuning but there will no major radical changes in these taxes,'' he said.

On income tax, the Finance Minister said the rates were quite reasonable and moderate. Asked if the rates could be reduced in the next two to three years,'' I can't say. The tax base must become wider and compliance must become better,'' he said. To a q uery on apparent contradiction between attempts to lower tax levels and levying of surcharge, he said the government had not raised any surcharge except on education.

"Only in education we have raised the surcharge for a specific purpose. You can't in one breath say you must spend six per cent of the GDP on education and also say don't find funds for education. With a tax-GDP ratio of 11.8 per cent how can you provid e for education only from tax. Then, half of it will go for education. There are claims from other sectors like health and internal security.''

The Finance Minister said successive budgets have removed tax exemptions. On complaints of delays in refunds, he said the government has already introduced the Refund Banker System (RBS) in the national capital and was in the process of extending to two more cities. Eventually, tax-payers throughout the country will be benefited from the scheme, he said.

**Under the RBS, the day an assessment is made, three days after that refunds will be credited. At the moment, after the assessment, it takes three months, six months and one year. We plan to cut down delays through this system,'' he said.

Denying that a "pure'' salaried tax-payer would have problems of refund, he said by and large in nine out of ten cases of salaried tax-payer unless there was other income. On tax evasion, he said the answer was only use of technology and information wit h which evaders could be zeroed-in.