India is committed to taking hard and difficult decisions in the long-term interest of the economy. Addressing Japanese investors in Tokyo, Prime Minister Manmohan Singh today, however, assured Japanese industry that the long-awaited Goods and Services Tax (GST) regime facing hurdles from states will be in place in an appropriate type by 2014. Dr.Singh told leading business honchos at the Keidanren, the premier chamber of commerce and industry, that the present bilateral trade of 18 billion US Dollars does no justice to the enormous potential that exists between the two countries.
The Prime Minister faced some searching questions from Japanese industry which sought improvement in tax regimes, further easing of priority sector lending rules to expand financial services and allowing the opening of foreign bank branches in metropolitan cities.
The Prime Minister said, as a result of a number of steps to revive the Indian economy, the Government expects the growth rate in the current fiscal (2013-14) to be much better than in the previous year, hopefully around six per cent or so.
He exuded confidence that the country will do even better in 2014-15.
The chairman of Keidanren, Hiromasa Yonekura, said Japanese investors are very keen to promote private-public partnership but were facing hurdles because of the complicated tax regimes in India, drawing an assurance from Dr.Singh that his government was determined to overcome these hurdles to enable the country return to the growth path of eight per cent.
On easing norms for Priority Sector Lendings (PSL), the economist Prime Minister said it was a tough technical question which was the preserve of the Finance Ministry and the RBI and then went on to add in a lighter vein, the
higher we go, the less you know about lower levels. Dr.Singh said while it will be easier for foreign banks to adjust to PSL norms, his government would evolve transitional methods to provide a hospitable climate for Japanese
industry and ensure its larger presence in the country.
Describing Japan as a major player in the modernization of Indian industry in the period after economic reforms, he noted that the Maruti-Suzuki partnership has become a household name in India.
Dr.Singh, who arrived in Tokyo yesterday on a three-day visit,said lack of quality infrastructure was the single biggest obstacle to achieving high levels of competitiveness in India.
He said government has targeted an investment of around one trillion USD in infrastructure over the 12th plan period, with half of it coming from the private sector and public-private partnership.He expected Japanese business to pick up a large share of the investment opportunities that India offers.
