INSUBCONTINENT EXCLUSIVE:
investors (FPIs) from an increase in taxes in this year's Budget approved by Parliament, two government officials told Reuters, in
comments that prompted a rally in stock markets.Finance Minister Nirmala Sitharaman faces pressure to roll back controversial tax measures
introduced last month as foreign investors pull funds out of domestic markets and automakers and other manufacturers report falling sales
and job cuts.Thursday's comments came after Reuters reported the government may hold back on two other budget measures - the issue of
controversial overseas sovereign bonds and a rise in the minimum shareholding norm to 35 per cent from 25 per cent.The benchmark NSE index
rose 1.78 per cent after the news.In the Budget last month, Ms Sitharaman proposed to hike taxes on those earning more than Rs 2 crore
($282,925.45) annually, a step that rattled many FPIs
Foreign investors took $1.8 billion out of Indian equities in July alone.Separately, domestic media said the government was considering
reducing tax on long-term capital gains introduced three years ago, as a step to further boost markets.Ms Sitharaman, who held meetings this
week with businesses and investors, is widely expected to amend some Budget proposals and announce new measures to boost economic growth,
which hit a five-year low of 5.8 per cent in the January-March quarter.One of the officials, who declined to be named, said the government
will issue either a notification or an executive order that could be later submitted to parliament for approval, to exempt the foreign
portfolio investors, mainly registered as trusts, from the increase in surcharge on super rich taxpayers.The government estimates a total
revenue loss of Rs 400 crore if it withdraws the higher taxes on foreign portfolio investors, the second source said.The source added the
government does not plan to withdraw or cut taxes on Indians earning more than Rs 2 crore, however.Ms Sitharaman said steps would be taken
"fairly quickly" to help the industry after meeting representatives of the auto sector, which has cut thousands of jobs.The finance minister
generally meets industry groups ahead of the Budget to ensure it reflects their concerns.Kiran Mazumdar-Shaw, managing director of biotech
firm Biocon Ltd, had told Reuters the government needed to open dialogue with industry to help revive economic growth.Get Breaking news,
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