Caution before Budget: 'Wealth tax or any other new tax will do more harm than good'

New Delhi, Jan 19 Any new tax like wealth tax or others at this point could do more harm than good, SBI Research has cautioned ahead of the Union Budget to be tabled in the Parliament on February 1.

If the disinvestment of LIC passes through in FY22, the government might be ending the fiscal with a large cash balance of Rs 3 lakh crore. This can come handy in supporting a large part of the government fiscal deficit without taking recourse to market borrowings, the report said.

"We caution that any new tax like wealth tax or others at this point could do more harm than benefit," it said.

Regarding sector-specific suggestions, SBI Research said 6.33 crore MSME units in India contribute 29 per cent to India's GDP, employing over 11 crore workers. Credible source to verify cashflow and seamless access for banks to GST 4 /ITR on real-time basis should be allowed for lending to SMEs, it said.

Separately, availability of real time information on a single window by the government through a regulatory architecture from various sources viz. income tax, Ministry of Corporate Affairs

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