The CPI-M on Thursday made a strong demand for re-introduction of long term capital gains tax in the forthcoming budget with a view to widen the tax base.

Rajya Sabha MP and CPI-M Politburo member Sitaram Yechury said the government, instead of raising tax rates, should aim at widening the base by re-introducing long term capital gains tax and bring 10 per cent of the rural rich within the net.

"A wage earner gets salary after paying TDS. Why should people making crores from the stock market not be taxed?" he asked at a meeting organised by the Merchants' Chamber of Commerce here.

Yechuri said his party had given a formal representation to the government for considering the re-introduction of long term capital gains tax in the budget.

He also made a strong case for taxing 10% of the rural rich. He said if the government taxed this segment, it would be able to generate huge revenues without resorting to hiking existing rates.

The CPI(M) is all for the growth of the corporate sector and the creation of wealth, Yechury said.

There is a general misconception that the communists are essentially concerned only with the distributive aspect of an economy, that they want an egalitarian distribution, and that is their only concern, and therefore they are not really bothered about the growth of the corporate sector Yechury said.

But this is not true, he said, in a talk on his vision for the Indian economy.

He reminded the industrialists that distribution comes only after production. If there is no increase in wealth and no increase in production, then the question of distribution becomes totally infructuous.

He said increase in productivity, production, increase in wealth, is a precondition for a proper welfare of the people.

He said the Communists are in favour of corporate growth or industrial development and the opposite does not really gel with our ideology.

Yechury, who is also a Rajya Sabha member from West Bengal, said there should be a long-term capital gains tax that would help the government garner resources for more public investment.

This would help bring stock market gains within the tax net, Yechury said.

Among other policy changes in the fiscal arena, Yechury said, the government must take steps to bring the top 10% of the rural rich in the tax net.