Ahead of the Union Budget, corporate America has urged Finance Minister Arun Jaitley for further reduction in tax uncertainty for multinational companies and institutional investors, a step which it said would help attract more foreign direct investments to India. "A significant positive step toward improving the investment climate would be to further reduce tax uncertainty for multinational companies and institutional investors in India," Nisha Desai Biswal, the president of the US-India Business Council (USIBC), said in a memorandum submitted to Mr Jaitley. Noting that in today's economic environment, scarce capital is allocated to markets offering optimal returns, Ms Biswal said global businesses allocate investments where post-tax returns for a given risk profile are highest. When tax costs are uncertain, particularly in a foreign country, investors normally provide for them on a most conservative basis, she said. "Therefore, tax uncertainty results in an increase of risk when investing in any given project drives investors to either withhold investments or require a higher rate of return to account for this risk, thus raising the cost of capital in the uncertain market," said Ms Biswal, who was the Obama administration's point person for South and Central Asia.