Private Corporate Investment in 1978 A Forecast

the tax, though it is not certain that the entire shortfall in income tax receipts, compared to the 1977-78 Budget Estimates, can be attributed to just this measure. What the change now proposed seeks to do is to withdraw the tax exemption of capital gains from re-investments in fixed deposits and to restrict the eligibility with respect to shares to only investments "made in equity shares of new industrial companies". So a big industrialist can sell his personal property at as high a price as possible and invest it in the equity of his newly floated industrial company and pay no tax at all. No questions are asked about how genuine is the new issue or how long must that investment remain locked there. In any case the industrialist concerned is in full control. So why bother? What a bonanza he gets, which others who placed their gains in fixed deposits and drew loans on their strength will hereafter be denied? I have frankly no sympathy for either group.