New Delhi: Finance mnister, P Chidambaram, on Wednesday
said that there was no proposal to tax foreign institutional
investor (FII) inflows, setting at rest fears over such
a possibility in the wake of the comments made by the
Reserve Bank of India (RBI) governor, Y V Reddy.
am quite clear in my mind that there is no question of
taxing FII inflows. There is no proposal to tax FII inflows,"
Chidambaram said reacting to Reddy''s comments in Mumbai
RBI Governor had expressed concern over volatility in
domestic stock markets due to FIIs'' investments and said
a view of price-based action like taxes could be considered.
RBI governor''s comments led to fears that the government
may tax FIIs in the ensuing Bbdget. The FIIs are understood
to have been net sellers on Wednesday. The Sensex was
down by 120 points on Wednesday to close at 6,102.74 points.
Chidambaram clarified: "he (the RBI Governor) intended
the exact opposite. In fact, his view is that taxing FII
inflows is not effective at all."
fnance mnister said the idea of taxing FII inflows had
come up from time-to-time. "I rejected it earlier.
I reject it now," he added.