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EconomyAmbani, Adani and Tata May Consider Relocating Overseas if India Levies Inheritance...

Ambani, Adani and Tata May Consider Relocating Overseas if India Levies Inheritance Tax, Warns Economist

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A recent proposal to introduce an inheritance tax in has sparked debate over its potential repercussions. In a thought-provoking analysis, political economist Gautam Sen cautioned that some of the country's most successful entrepreneurs may choose to shift their bases abroad to lower-tax jurisdictions if such a measure is implemented.

In an interview, Sen referred to industrialists such as Mukesh Ambani of Reliance Industries, Gautam Adani of the Adani Group, and others from the Tata conglomerate. He explained that with no income tax in place, Dubai has emerged as a popular relocation destination for affluent Indians in recent years. If faced with inheritance duties at home, it isn't unrealistic to assume our leading businessmen might follow a similar path for tax optimization purposes.

Noting how even prosperous nations like Sweden scrapped the levy due to capital flight concerns, Sen stressed the need to weigh short-and long-term economic impacts prudently. Removing it led to Sweden retaining more wealth over the long run, with government revenues and growth improving simultaneously – an outcome India should reflect on as well.

While redistribution of wealth is integral to development, the expert flagged practical difficulties in touring every household and enterprise annually for assessment. Only a tiny fraction of citizens file income tax currently, so realizing meaningful proceeds from the super-rich alone may be challenging.

More importantly, liquidating family-run conglomerates could paralyze vital sectors like small and medium enterprises that employ millions. Before charting any radical steps, extensive research and piloting tailored solutions seem advisable to avoid disruption in one of the 's fastest growing economies.

As the debate on tackling inequality rages on, Sen's calibrated perspective acts as a timely reminder of unintended fallouts that well-meaning policies can sometimes bring unless designed with sensitivity to ground realities. Overall though, he remained optimistic about India's economic progress if the current regime prioritizes stability and continuity in its visionary approach.

Northlines
Northlines
The Northlines is an independent source on the Web for news, facts and figures relating to Jammu, Kashmir and Ladakh and its neighbourhood.

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