Prime Minister Narendra Modi on Saturday defended his government’s decision to demonetise high-value currency notes and vowed to continue with sound economic policies for ensuring India’s future in the long run. He was speaking at the National Institute of Securities Markets in Raigad, Maharashtra. “Demonetisation is only a short term pain for a long-term gain,” the prime minister was quoted saying by news agency ANI. He added that the government has never taken decisions for short-term political gains.
Stressing that his aim is to make India a developed country in one generation, he asked those who profit from financial markets to make a fair contribution to nation-building through taxes. Asking the regulators and taxmen to think about the contribution of market participants to the exchequer, Modi said, “The low contribution of taxes may be due to the structure of our tax laws. Low or zero tax rate is given to certain types of financial income.”
Securities transaction tax also features among the various levies in the financial markets. According to estimates, an investor pays around 15.3 per cent in taxes. The Prime Minister’s remarks assume much significance ahead of the Budget to be presented in the first week of February.
“Those who profit from the financial markets must make a fair contribution to nation-building through taxes. For
various reasons, the contribution of tax from those who make money on the markets has been low. To some extent, it may be due to illegal activities and fraud,” Modi said without mentioning about any particular tax.
“We should consider methods for increasing it in a fair, efficient and transparent way,” added the Prime Minister,
while inaugurating the new educational and training campus of the Sebi-run National Institute of Securities Markets in this industrial township near Mumbai. Modi said tax rates can go up as every investor today gets equal tax treatment.
“In the past, there was a feeling that some investors were getting an unfair deal by using certain tax treaties. As you know, those treaties have been amended by the government. Now, it is time to rethink and come up with a good design which is simple and transparent, but also fair and progressive.”
In a veiled reference at his critics, the prime minister also said that the true measure of success is the impact felt in villages, not in Dalal Street or Lutyens’ Delhi. Highlighting his government’s achievements, PM Modi said the constitutional amendments on GST which were ‘pending for years’ were passed and that ‘GST will soon become a reality’.
“We have made progress and improved ease of doing business. FDI has now reached record levels,” PM he said.
The prime minister is on a day-long visit to Maharashtra where he will lay the foundation for a memorial dedicated to Maratha warrior king Shivaji and a couple of Metro projects in Mumbai and Pune.
(With PTI inputs)