Impose 2 pc tax on FIIs, says Assocham

NEW DELHI: The industry body Assocham today suggested that FIIs should be charged a tax of 2 per cent of their money pumped into the stock market to prevent further rise of the rupee and also an asset-bubble.

Foreign Institutional Investors have put in over Rs 71,900 crore so far this year in the country's bourses, the highest ever investment made in rupee terms in a single year.

Assocham said the investments in Indian equities are likely to exceed record levels of close to USD 18 billion in the current fiscal.

"If this goes unchecked, neither the rupee appreciation be stopped nor inflation put to check and India's exports competitiveness would gradually fizzle out," it added.

Imposing the tax would help the RBI to manage rupee at reasonable levels to safeguard and support Indian exporters, hit hard by input cost and appreciating rupee, Assocham said.

The Rupee has appreciated over 5 per cent against the US Dollar in the last six months.