The CPI wants the government to include a package of incentives in the Union budget to encourage non-resident Indians (NRIs) to invest in infrastructure and other productive sectors.
Party general secretary AB Bardhan told Business Standard that NRIs had hitherto invested mostly in real estate, which had driven up real estate prices in towns and cities.
The NRIs money can be better utilised for productive purposes and the government must come out with a proposal in this direction, Bardhan said. He planned to suggest it to finance minister P Chidambaram at the United Front steering committee meeting today. The Prime Minister had asked members at the last meeting for ideas on how to mobilise additional resources. The CPI has sought help from Leftist economists like Prabhat Patnaik and Kamal Narayan Kabra to prepare its suggestions.
Bardhans other suggestions include taxing capitalist farmers and large farmhouses, a graded tax on large land holdings and on large purchases of gold, a presumptive tax on professionals, the continuation of the Minimum Alternate Tax and increases in capital gains and wealth taxes.
Bardhan said that, although taxing rich farmers might not be possible now, the process could begin with capitalist farmers such as those with large holdings in green revolution areas.
CPI deputy general secretary N Giri Prasad added that the party would press for educating people on the importance of paying taxes.
Prasad said the assumption that less taxes lead to better collection must be abandoned, although there is a need to increase the base of direct taxes. He has spoken against any drastic change in the income tax exemption limit but suggests that the tax on the lowest slab could be reduced from 15 to 10 per cent.
Bardhan said the country had large gold reserves which were not properly utilised. Gold was frequently purchased and stored by the rich and efforts should be made to utilise them for productive purposes. To begin with, he said the government could impose a graded tax on purchase of gold beyond a certain limit.
About the fiscal deficit, Bardhan said that the noise being made about the fiscal deficit is rather too much and much of it is in response to the dictates of the IMF and World Bank. These agencies want to see the allocation to social sector being curbed. There is nothing objectionable about the size of fiscal deficit as long as it is within controllable limit. Bardhan said the budget should be growth-oriented but growth must be intertwined with employment generation and should also work to improve human development indices. He said his party wanted higher allocations for the social sector, particularly in health and education.
