It is not unusual for private sector India to issue “wish lists” when the Union budget is around the corner. But it is a measure of the fear that taxmen command these days that a large number of corporate leaders fear the imposition of a “super rich” tax in the coming budget.
As reported in Mint on Thursday, two-thirds of the respondents in a survey believe that such a tax is now a distinct possibility.
The issue has been debated widely in the past month. If a “super rich” tax is imposed, it may yield more money to the government, but it will certainly dampen the investment climate in the country. As such, it will be an incoherent response to the policy muddle that prevails in India today. On the one hand, the government is trying hard to woo foreign investors; on the other hand a tax of this kind will only depress domestic sentiment. Overall, the effort will be counterproductive.