Indian industry leaders on Wednesday urged finance minister P Chidambaram to not impose a tax on the 'super rich', and to maintain a stable tax regime to boost investor sentiments and capital inflows as the economy appears on track for its worst growth in 10-years.
"Higher tax on
high income group taxpayers is uncalled for as this would discourage entrepreneurship," said FICCI president Naina Lal Kidwai.
"It could lead to professionals relocating to low-tax domiciles... We also oppose an inheritance tax."
Chidambaram met business leaders on Wednesday as part of consultations ahead of the budget for 2013-14.
"The finance minister's emphasis was on kick-starting large-scale investment in India and to ensure a sustained flow in foreign and domestic investments. We need a stable regulatory regime," said Anand Mahindra, CMD, Mahindra & Mahindra.
"Our opinion is tax them (the rich) but tax them reasonably," said Rajkumar Dhoot, president of Assocham. "The investments from the rich give excise duties, sales tax, revenues - and jobs."
"We have said any increase in taxes (on rich) will create a negative perception on investment and should be avoided," said Adi Godrej, president of Confederation of Indian Industry.
"The immediate priority of the government is to keep the investment cycle going," a finance ministry statement said after the meeting. "(The finance minister) said both domestic and foreign investments are not an option but an economic imperative for the government."
Industry leaders racheted up their demands.
"There is a need to create an export development fund with a corpus of minimum 0.5% of the preceding year's exports," said M Rafeeque Ahmed, president, Federation of Indian Export Organisations.