Slow Death by Taxes

India's top industrialists are normally a tight-lipped group. Forced to steer their organizations through the red tape regulations of a government-dominated economy, they rarely sound off in public, disguise their occasional criticisms as quiet suggestions. Now, angrily and in public, they are issuing a warning to Prime Minister Lai Bahadur Shastri's socialism-bent government. Cut taxes or see India's industrial growth halt completely.

Taxes have risen to such confiscatory levels, charge the industrialists, that Indian investors are afraid to put money into new ventures or into the expansion of existing ones. Said India's No 1 industrialist, J.R.D. Tata, at a New Delhi neeting: "No other country, including the most socialist countries, has resorted to such heavy, complicated and multiple burdens of taxation." As a result, added Steelman Tata, businessmen show "universal gloom, despondency and uncertainty about the future." K. P. Goenka, president of the powerful Federation of Indian Chambers of Commerce and Industry, charged that past 16 months have brought "no substantial additions to any major industry," and G. L. Mehta, chairman of the Indian Investment Center, complained that so many efforts to float stock issues have flopped that "underwriters have become undertakers."

The problem arose in 1963, when the government boosted individual income taxes by as much as 450% and tacked a "super-profits" tax ranging from 50% to 60% on top of what was left after an existing 50% corporate levy. If there was anything India's staggering economy did not need, it was new shackles. The country's third five year plan, now in its 47th month has failed so badly that food output has not kept pace with population growth Unemployment is soaring, and per-capita income has failed to gain for three years. To bolster the economy, India is wooing private foreign capital, but this effort, too, has run afoul of high taxes India requires foreign investors to have a local partner; usually, the Indian finds he cannot raise his share of the money.

This file is automatically generated by a robot program, so reader's discretion is required.