Pre-Budget meet: Bankers look for comm transaction tax

At a time when French actor Gerard Depardieu has fled to Russia to avoid the super-tax on French millionaires, the age old idea of an inheritance tax is making its way back into Indian tax discourse, with economists telling the Finance Minister today that they were in support of such an idea. Meanwhile bankers, whom the FM met separately, reminded him of the commodity transaction tax that Chidambaram had imposed in the Budget for 2008-09. CNBC-TV18's Aakansha Sethi reports.

Fiscal consolidation and political expectations of a populist Budget are likely to shape the finance ministry's thinking this February. No wonder then that pre-Budget discussions have focused on revenue enhancement - via new taxes. While a tax on the super-rich was opposed at a meeting of economists with the fin min, they did propose the need to increase the tax base.
Bankers too are keen on the reintroduction of a tax on commodities transactions. On the grounds that equity market flows were diverted to commodities due to the Securities Transaction Tax (STT).
Reintroduction of tax exemption for infrastructure bonds, transparency in gold and real estate transactions were also some of the ideas discussed at the meeting. SBI hopes RBI will cut lending rate, lower CRR on Jan 29
P Chidambaram is the only FM in recent history to have introduced new taxes and also undertaken significant moderation in tax rates. Will it be a repeat this time around too or will populism triumph over pragmatism?