Finance Minister's Budget disappoints Kerala to attract NRIs

 

THIRUVANANTHAPURAM, July 08, 2004
NRIgroup, Kiren Patel

Gulf NRIs, business community and organisations in the Gulf expressed disappointment that NRI interest income in India was being taxed. NRIs urged the Finance Minister to reconsider raising of service tax from 8 per cent to 10 per cent and as also the educational cess of 2 per cent. The captains of industry and commerce have unequivocally denounced the widening of service tax, educational cess, income tax on NRI deposits and 15 per cent transfer fee on share transaction.

Ram Buxani, a leading member of the Indian business community who was away in Singapore to attend a seminar, hoped the government would not go ahead with the move to tax the NRIs, but lauded the Finance Minister for focussing on the rural sector and education.

The kind of action move will not only plug flow of funds from abroad to India but NRIs may also move their funds out of India.. "The budget is growth-oriented and will help lower poverty because of its thrust on agriculture and rural development, but the move to tax NRI interest income was a blow to overseas Indians," Ismail Hukkawalah, president, Indian Business and Professional Council (IBPC), said.

chairman Pravasi Bandhu, an NRI organisation and K V Shamsudheen, director, Barjeel Securities, said that the proposal to continue to exempt equity-related mutual fund from dividend tax would be healthy for the stock market. NRIs should not have been taxed as they had always extended their support during hard time and crises.