PM to embark on Canada visit tomorrow

Prime Minister Manmohan Singh leaves tomorrow on a three-day visit to Canada for attending the G-20 Summit which will review the current status of the global economic recovery and discuss a tax to fund future bail out of banks, a proposal India is opposed to.

Singh, who will head a high-power Indian delegation to the two-day summit in Toronto on June 26 and 27, is expected to place on record India's opposition to such a banking transaction levy on the ground that Indian banks did well during the 2008 financial crisis sparked by weak regulation norms in developed countries.

Notwithstanding the rejection of the tax idea at the G-20 finance ministers meeting in Busan in Seoul earlier this month, countries like the US, France and Germany, favour such a levy.

They are expected to pursue their demand in Toronto while the new British government has announced imposition of a banking levy in its first budget.

Besides India, countries like hosts Canada, Japan and Brazil have their reservations on such tax-funded bailouts.

Finance Minister Pranab Mukherjee, who attended the Busan meet, said that the G-20 communique was a compromise because a section of the countries felt that there was no no need of having any such taxation.

"If there are well-placed regulations that can take care of this problem the health of the banks can be protected," he said.