Ambani meets PM, decries demands for windfall tax

Mon, Jul 14 03:53 PM

New Delhi, July 14 (PTI) With UPA government's new found ally Samajwadi Party gunning for Reliance Industries, the company head Mukesh Ambani today met Prime Minister Manmohan Singh and a host of other senior government functionaries to explain how the demand for levy of windfall tax was bad economics. Ambani first met Singh and there were unsubstantiated reports that he followed this with a meeting with Congress President and UPA Chairperson Sonia Gandhi.

Flying in from Mumbai this morning, Mukesh started a series of meeting with top bureaucrats, including a call on Cabinet Secretary K M Chandrasekhar. Ambani's visit assumes importance in the wake of Amar Singh raising a number of issues, including a demand for withdrawal of EOU status for RIL's Jamnagar refinery along with a suggestion that Prime Minister should intervene to bring peace between Mukesh and younger brother Anil.

Sources said Ambani pleaded that the demand for levy of so-called windfall profit tax on private firms was no more than a populist slogan based on the misleading logic that with rising prices of oil across the globe, these companies are making profits far in excess of what they legitimately deserve. While Government shares production from oil and gas fields and is a beneficiary of high oil prices, the refinery business is highly cyclical and with new capacities coming on stream world over margins will decline precipitously.

Ambani is believed to have told policy makers that fiscal revenue gain from a WPT would be short-term in nature, but the economic costs of introducing an unstable fiscal regime could be long lasting. PTI.

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