By Sumeet Chatterjee and Anurag Kotoky
MUMBAI/NEW DELHI, Feb 28 (Reuters) - High-earning Indians
gave a collective groan on Thursday when the government imposed
a 10 percent surcharge on their income, following a global trend
which it expects to be popular in an election year.
Just 42,800 of India's 1.2 billion people will be affected
by the extra take on pay above 10 million rupees ($185,600),
according to the finance minister.
The measure will be in place for one year.
"There are substantial number of people with good income who
are not paying taxes and the focus should have been more on
bringing them under the tax net," said Sunil Duggal, CEO of
consumer goods maker Dabur India.
"He should have ensured compliance so that more people who
have avoided taxes are brought into the net of taxes," said
Issac George, director of GVK Power & Infrastructure Ltd
Dozens of corporate executives, watching a telecast at an
industry event in New Delhi, exchanged nervous smiles as Finance
Minister P. Chidambaram introduced the surcharge in his budget
Chidambaram, seeking extra cash to fund a dash for growth,
said he expected those affected to pay up "cheerfully."
The ruling Congress faces elections by May 2014 and the tax
move is likely to play well with its largely rural and poor core
India had 125,500 dollar millionaires in 2011, according to
a Capgemini and RBC Wealth Management world wealth report
released last year.
($1 = 53.8775 Indian rupees)
(Additional reporting by Aditi Shah; Editing by David Cowell)