In his 2005-06 budget speech finance minister P Chidambaram said, "Tax treatment of savings is a complex issue but we can benefit from the best international practices in this regard. We have already introduced EET-based taxation in the defined contribution pension scheme applicable to newly recruited government servants. Before we fully migrate to the EET system for all kinds of savings, it is necessary to resolve a number of administrative issues. Hence, without making any change for the present, I propose to set up a committee of experts that will work out the road map for moving towards an EET system."

Accordingly, on July 9, this year, the government set up a committee comprising Dr Kannan, Gautham Bharadwaj, Dinesh Kanabar, Vijay Mathur and Ms Kerawala.

An EET regime would result in the government exempting the contributions made to tax savings instruments / schemes, exempt the accumulations but tax the withdrawals.

"We have to study all the tax savings instruments / scheme that are available in the country and also the method followed in other countries before recommending our roadmap for the country to migrate towards the EET regime," says Dr.Kannan. The committee has been given three months time to complete its mandate.

Dr Kannan, a fellow member of ASI, is on deputation to SBI Life from the Reserve Bank of India where he served as adviser, department of economic analysis and policy. During 1994-98, he served as adviser in the International Monetary Fund, Washington, and during 1992-94, he was adviser to the governor, Bank of Mauritius, Mauritius.

Dr Kannan holdfs a masters in econometrics from the Madurai University from where he also acquired an M A in economics. He did his Ph. D., from Bombay University and in 1987-88 he worked as a post-doctoral fellow in the University of Pennsylvania, under noble laureate, Prof. Lawrence Klein. Dr Kannan has written about 40 research papers and served in eight working groups relating to various aspects of money and finance.