Weekly Notes from Volume XV No 10, March 9, 1963.
It
speaks volumes for the inanity of the super-profits tax that even so
staunch an opposer of the private sector as the editor of The
Economic Weekly is constrained to denounce it as “completely
misconceived”. Although you have praised the technical
excellence of the Finance Minister’s economic advisers, one
must confess that it is hard to share your enthusiasm if this
extraordinarily absurd tax is an example of their technical ability.
On the contrary, it shows the unreal atmosphere in which the Budget
is planned by what has so rightly been called by Shri Palkhiwala, the
Delhi intellects.
No
doubt, in common with all other sectors – except those that are
favoured by the Congress like farmers, khadi manufacturers and
bootleggers – the corporate sector is expected to bear some
share of the burden that has been imposed on the tax-payer for the
nation’s defence…
Yet,
poor businessmen in Bombay, who are probably dishonest men, cannot
help feeling a little confused at the economic considerations which
prompted the imposition of a levy which discriminates against
efficiency and limited companies in favour of over-capitalised
companies and rentiers; for, under the provisions of the
super-profits tax, an individual who has invested Rs 1,00,000 in
forming a limited company and makes a profit of Rs 50,000 is no
better off than a man who purchases a flat with that Rs 1,00,000
without forming a company and earns a rent of Rs 18-20 without going
to all the bother of working for his living…
…it
is terribly important to realise that it is not profit, nor the
amassing of profit, which is evil, but the use it is put to; what
needs to be discouraged is not the making of money but its
distribution; the curb should, therefore, be not on profits but on
dividends.
Comments
EPW looks forward to your comments. Please note that comments are moderated as per our comments policy. They may take some time to appear. A comment, if suitable, may be selected for publication in the Letters pages of EPW.