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'Long-term capital gains tax may go'

Jaswant Singh said he may abolish long-term capital gains tax totally if the Iraq situation and drought condition in India eases.

business Updated: Mar 01, 2003 15:51 IST
Press Trust of India
Press Trust of India

A day after presenting the Budget, Finance Minister Jaswant Singh on Saturday said he will consider abolishing long-term capital gains tax totally if the difficult war-like situation in Iraq and drought condition in the country eases.

"There are constraints in managing the economy because of the uniquely combined challenge of drought situation, war like situation in Iraq, crude oil prices soaring to $35 a barrel and recalcitrant neighbour," he said adding if the situation improves, "I can redraft (abolish) it."

The capital markets are depressed not only in India but also globally and in such a situation, he did not want to fully abolish long term capital gains tax at this juncture, Singh said.

However, he would consider when the constraints ease and the economy starts looking up, Singh told the captains of industry at FICCI's post-budget interactive session.

On the demand of the industry that LIC's pension schemes announced in the Budget be opened to private insurers as well, Singh said he would consider it.

Admitting that the fiscal situation was "worrying", Singh said the Budget has attempted "a balance of fiscal responsibility. We cannot continue with revenue profligacy."

Listing out the salient features of the Budget, Singh said debt management was another area where far-reaching steps have been taken.

The measures announced would help debt swap of at least Rs 83,000 crore of states' debts besides Rs 40,000 crore repayment of high cost government securities of banks, to address the non-performing assets, he said adding these, together with prepayment of about $3 billion of ADB and World Bank loans would improve the debt situation.

First Published: Mar 01, 2003 12:31 IST