The Securities and Exchange Board of India chairman G N Bajpai on Thursday said the elimination of long term capital gains tax and cut in short terms gains tax to 10 per cent will make securities investments more attractive and provide fillip to development of the market.

The Budget for 2004-05 with emphasis on the sustainable growth stability and equity would provide conducive climate for economic growth, Bajpai said in his reaction to the
Budget.

The hike in investment limit on the foreign institutional investors exposure to debt market to $1.75 billion from $1 billion and tax policies including scrapping of long term capital gains tax would make India an attractive investment destination, he added.

Asked about the resolution of long standing issue of brokers' fees, Bajpai said the capital market regulator has arrived at a solution and would make an announcement shortly.

Referring to confusion over the imposition of turnover tax on the securities transaction, he said the finance ministry was an appropriate forum to address this issue.