BUDGET 1999-2000
BUDGET 1998-99
BUDGET PROCESS
COLUMNISTS
ECONOMY
INDUSTRY
FINANCE
BUDGET ARCHIVES

COMMENTARY
INTERVIEWS
SPECIALS
CHAT
ARCHIVES

Economist urges no-tax on equities sale, concessions to infrastructure investors

Noted industrialist and economist Fredie Mehta has urged Union Finance Minister Yashwant Sinha to abolish capital gains tax on sale proceeds of equities used for purchase of other stocks in the market.

Already the government has made sales proceeds of gold reinvested in stocks free of tax liability. The measures will provide a chance to large number of investors to look at those 10 or 15 per cent of shares which are worthy of investment but languishing in the market, he said.

Mehta, who is the director of Tata Sons Limited, said in a pre-Budget meeting organised by the Indian Merchants' Chamber that the government must scrap capital gains tax on the proceeds of corporate mergers, acquisitions and other forms of restructuring. Equity must rescue us from the perils of rising debt burden, he added.

The second area which requires immediate thrust is disinvestment of public sector undertakings. Of the Rs 240 billion PSU disinvestment targetted four years ago, only Rs 20 billion has been achieved, he regretted.

Mehta said that the third area that the finance minister must address is private investment in infrastructure projects. Any company investing in infrastructure projects must get tax concession, he added.

Stress should also be on revitalising mutual funds to boost the stock market. The government must make dividend paid to investors by mutual funds tax-free so that the schemes are attractive.

IMC president Y P Trivedi said items such as salt, edible oils, sugar, gur and medicines should attract low or nil tax rates. Also, there should be parity in taxes on commodities going into production of goods. He said tax rates must go up progressively from raw material to final stage.

UNI

Budget 1999-2000

Business news