The amendment proposed in the Finance Bill 1998 would require individuals who stay in the country for over 180 days or more to pay tax on their global income in India.

According to Ficci, such retrograde measure would reduce the interest of non-resident Indians and foreign joint venture partners in the country and thus adversely affect their businesses here.

The apex chamber has also stated that the tax rate of 35 per cent fixed for firms in the Budget 1998-99 should be brought down to 30 per cent. This will ensure that the highest tax rate for the firms in line with the highest slab applicable to individuals as was the situation prior to April 1997.

In a post-Budget memorandum submitted to the government, the chamberhas stated that the tax rate on long-term capital gains should be halved to 10 per cent for both individuals and domestic companies to bring it on par with that for non-resident Indians and foreign institutional investors.

The chamber has felt such a measure would help in reviving the sluggish domestic capital market. The chamber has also suggested that the government should extend certain incentives to the infrastructure sector to ensure rapid development. In the power sector, Ficci states that five-year tax holiday should be extended to all power projects irrespective of the location of the plant for as long as the power crisis looms.

In the telecom sector, there should be a one-year moratorium on telecom license fee payment, extension of the license period to 15 years in the case of cellular projects, to 25 years for basic services, extension of infrastructure status to the entire telecom industry including e-mail, radio trunking, internet service providers etc.

The government should also enhance thededuction allowed on interest payment of loans for housing, Ficci has stated. The chamber has also felt that the creation of three categories of salary earners for the purpose of standard deduction is discriminatory and uncalled for and will lead to unnecessary complications. There is no rationale in denying the benefit of standard deduction to those with income over Rs 5 lakh, an entitlement they were eligible for all these years.

Ficci has further stated that the standard deduction of Rs 25,000 should be uniformly applicable to all salary earners.

The chamber has further pointed out that the restriction of tax exemption on income on investment in the primary market would restrict the liquidity of the bonds/debentures issued to fund the infrastructure. It is to be appreciated that if there are no benefits to secondary market investors, there may not be adequate market for these investments and therefore, marketability of such bonds and debentures would be affected, Ficci has stated.