HDFC Bank managing director Aditya Puri today said that the idea of taxing the super-rich could prove counter-productive and lead to evasions.
"If you go back in the last 50 years, in any country, it has proved counterproductive. If you are charging the super-rich more, they know how to do their tax planning and you only lead to an evasion," he told reporters on the sidelines of a co-branded credit card, targeting the youth, launched by HDFC Bank and Times Card.
Finance Minister P Chidambaram had last month said that "when the economy requires, government requires more resources, the very rich willingly should pay a little more". The comments had stirred up a debate making investors looking for a stable tax regime uneasy.
Clarifying that he is neither against the move and nor supporting it, Mr Puri said though it was "a good political move it does not serve any purpose". Asked for his expectations from the union budget to be presented on February 28, Mr Puri said one should be happy if Mr Chidambaram delivers on whatever he has been promising lately.
"I would be very happy if Mr Chidambaram is able to produce what he says is going to produce," Mr Puri said, adding that he would watch out for areas like fiscal deficit, arresting subsidy burden and steps to revive investors' sentiment in the budget.
In a bid to woo global investors, Mr Chidambaram had done a series of road shows in financial centres like Hong Kong, Singapore and Frankfurt affirming the government's commitment to the reform process and resolve to stick to the road-map of fiscal consolidation.
Mr Puri informed that HDFC Bank is the largest player in the credit cards business, commanding a 35 per cent market share, and its portfolio stands at Rs 10,000 crore, the largest in the industry.