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Mukesh meets Manmohan

New Delhi: Reliance Industries Limited (RIL) chief Mukesh Ambani on Monday met Prime Minister Manmohan Singh and a host of senior government functionaries and told them that demands for levy of windfall tax was bad economics.

Mr. Ambani first met Dr. Singh and there were unconfirmed reports that he followed this with a meeting with Congress president and United Progressive Alliance chairperson Sonia Gandhi.

Flying in from Mumbai in the morning, Mr. Ambani started a series of meetings with top bureaucrats, including a call to Cabinet Secretary K. M. Chandrasekhar.

His visit assumes significance in the wake of Samajwadi Party leader Amar Singh’s demand for withdrawal of the Export Oriented Unit status to the RIL’s Jamnagar refinery and a proposal that Dr. Singh intervene to bring peace between Mr. Mukesh Ambani and younger brother Anil Ambani.

According to informed sources, Mr. Mukesh Ambani said the demand for the levy of windfall profit tax (WPT) on private firms was no more than a populist slogan based on a misleading logic that with rising global prices of oil, such companies were making profits far in excess of what they legitimately deserved.

While the government shared production from oil and gas fields and was a beneficiary of high oil prices, the refinery business was highly cyclical and with new capacities coming on stream world over, margins would decline precipitously. Mr. Ambani is believed to have told the officials that fiscal revenue gain from a WPT would be short-term in nature, but the economic costs of introducing an unstable fiscal regime could be long lasting. — PTI

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