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Tax rise for high earners may trigger fund flight from India: Bimal Jalan

Finance Minister Nirmala Sitharaman, in her budget this month, raised taxes on people earning more than Rs 1 crore a year to at least 42.7%.

Bimal Jalan (pictured), former RBI governor, also pitched for a rating upgrade for India due to a number of steps taken by the government
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Bimal Jalan (pictured), former RBI governor, also pitched for a rating upgrade for India due to a number of steps taken by the government

Reuters New Delhi
A former Reserve Bank of India (RBI) governor, Bimal Jalan, has warned that the higher income taxes the government introduced in its budget could lead to a flight of funds from the country.

"In theory if tax rates are very high, obviously people look for other countries, which have lower interest rates, and also exemptions from income tax," said Jalan, 77, who chairing a central bank panel deciding on how much of the RBI's reserves should be transferred to the government.

Finance Minister Nirmala Sitharaman, in her budget this month, raised taxes on people earning more than Rs 5 crore

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First Published: Jul 29 2019 | 7:46 PM IST

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