Mukesh meets PM

Tag : reliance industries
NEW DELHI: With UPA government's new found ally Samajwadi Partygunning for Reliance Industries, the company head Mukesh Ambani onMonday met Prime Minister Manmohan Singh and a host of other seniorgovernment functionaries to explain how demands for levy ofwindfall tax was bad economics.

Ambani first met Singh and there were unsubstantiated reports thathe followed this with a meeting with Congress President and UPAChairperson Sonia Gandhi.

Flying in from Mumbai this morning, Mukesh started a series ofmeeting with top bureaucrats, including a call to Cabinet SecretaryK M Chandrasekhar.

Ambani's visit assumes importance in the wake of Amar Singh raisinga number of issues, including a demand for withdrawal of EOU statusfor RIL's Jamnagar refinery along with a suggestion that PrimeMinister should intervene to bring peace between Mukesh and youngerbrother Anil.

Sources said Ambani pleaded that the demand for levy of so-calledwindfall profit tax on private firms was no more than a populistslogan based on the misleading logic that with rising prices of oilacross the globe, these companies are making profits far in excessof what they legitimately deserve.

While government shares production from oil and gas fields and is abeneficiary of high oil prices, the refinery business is highlycyclical and with new capacities coming on stream world overmargins will decline precipitously.

Ambani is believed to have told policy makers that fiscal revenuegain from a WPT would be short-term in nature, but the economiccosts of introducing an unstable fiscal regime could be longlasting.