Prime Minister Dr Manmohan Singh has said that the government will soon announce steps to stave off investors' fears ensuing from taxations measures like anti-tax avoidance rule and retrospective tax amendments.
Speaking at a function to present Economic Times Corporate Excellence Awards in Mumbai yesterday, he said, the government has dispelled the atmosphere of gloom and doom. Admitting that certain tax measures like GAAR and retrospective tax amendments in the Budget have led to a very negative reaction from investors, he hoped to announce decisions on all these issues within the next few weeks.
Dr. Singh said, creating opportunities for employment and economic growth, bringing down fiscal deficit and ramping up investment in infrastructure will continue to remain the main focus the Government’s policy. He said that stabilizing government expenditure, making growth sustainable and inclusive and stepping the Public Private Partnership model are the most essential targets before the Government while framing policy.
Pointing out that the Cabinet has approved changes in the banking and insurance laws and also a new pension law, with higher FDI limits, the Prime Minister said it will be the Government's endeavour to have them passed by Parliament as soon as possible. They will make India's financial system more able to support growth.”
As regards the growth prospects for On the issues of global macroeconomic conditions, the Prime Minister said that the global economy is presently under stress and domestic constraints and global slowdown are the main reasons for the slowdown of the Indian economy. He also asserted that while all economies go through ups and downs, it is essential to correct weaknesses and take proper measures to accelerate growth and make it inclusive.
Dr. Singh also confirmed that the next 5 year plan promises a rail corridor for Mumbai and Delhi, trans- harbor link for Mumbai, two new seaports for West Bengal and Andra Pradesh, 5 new international airports and a policy to turn major airports in the country into international air corridors.
Speaking on the Government’s approach on foreign investment, Dr. Singh said, that difficult global market conditions and rising prices of petroleum products have pushed India’s Current Account Deficit above the normal level.
Since exports are not expected to grow rapidly in the near future, Foreign Direct Investment (FDI) is the best source of external financing to balance the fiscal deficit and Current Account Deficit of the country. A policy on External Commercial Borrowing (ECB) is also being modified to increase access to capital and banking facilities for everyone.
The Government also intends to roll out many ADHAAR related transactions rapidly to eliminate middlemen and help beneficiaries get direct access to funding and finance. The Government is trying to build a consensus on the proposed Goods and Services Tax (GST) and suggestions of the opposition will be heard carefully.
While every policy in a democratic economy is open to criticism, Dr. Singh urged the opposition to cooperate and help build consensus in matters of national interest.
Among the dignitaries present at the awards function were Union cabinet ministers Kapil Sibal and Anand Sharma, Planning Commission deputy chairperson Monetek Singh Ahluwalia, Governor of Maharashtra K. Shankarnarayanan, Chief Minister of Maharashtra Prithviraj Chavan and Unique Identity Authority Chairman Nandan Nilekani,
Earlier today, Prime Minister Dr. Manmohan Singh also inaugurated the new 6th floor of the Asian Heart Institute in suburban Bandra in Mumbai.
