Budget 2013: 10% surcharge on crorepatis; imported vehicles dearer

It wasn’t quite Hugo Chavez or Indira Gandhi at the peak of the socialist era. Instead, Finance Minister P Chidambaram invoked Azim Premji to provide intellectual ballast to India’s own version of a tax on the super-rich.

“I believe there is a little bit of the spirit of Azim Premji in every affluent taxpayer,” he said, referring to the chairman of Wipro who had advocated the idea recently. Chidambaram expressed incredulity that only 42,800 persons had admitted to a taxable income above Rs 1 crore.

The minister also raised Customs duty on imported luxury cars, motorcycles and yachts and imposed a surcharge on corporate tax, giving the budget a faintly 1970s’ redistributionist feel. In doing so, he appears to have tapped into a widespread zeitgeist prevalent in most major economies that the rich need to pay their fair share in hard times.

India’s super-rich appear not to have reacted with the fury that some of their US counterparts have directed against President Obama, who raised taxes on them this year. Infosys founder NR Narayana Murthy welcomed the move.

“It’s not about the impact; the move will send out a positive signal. Quite happy to pay 10% extra. It will not hurt corporate sentiment, and those who feel hurt don’t believe in an inclusive growth,” he told ET NOW. Chidambaram was eager to play down any talk of class warfare, ticking off reporters who used the term “super-rich” at a post-budget press conference.