BackWe have dispelled atmosphere of gloom and doom: PM
PM says govt will soon announce steps to stave off investors’ fears ensuing from taxation measures
Premium(Ramesh Pathania/Mint)
Mumbai: Prime Minister Manmohan Singh on Saturday said the government has dispelled the atmosphere of “gloom and doom" and will soon announce steps to stave off investors’ fears ensuing from taxation measures such as anti-tax avoidance rule and retrospective tax amendments.
“We have dispelled gloom and doom, improved the climate for foreign investment, improved ministry coordination, and are working hard to restore investor confidence and the growth environment," he told business leaders at The Economic Times Award function here.
Admitting that certain tax measures such as GAAR (general anti-avoidance rules) and retrospective tax amendments in the budget have led to “a very negative" reaction from investors, he said: “We hope to announce decisions on all these issues within the next few weeks."
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 our endeavour to have them passed by Parliament as soon as possible. They will make our financial system more able to support growth."
As regards the growth prospects for the current fiscal year, Singh said the Indian economy has been affected by the slowdown in the global economy and this has dampened the investor sentiment.
“Growth decelerated to 6.5% last year and may be only around 6% in the current year. This has dampened investor sentiment. Doubts are being raised in some quarters about the India growth story going astray..." “But we can, and we must, correct our own weaknesses, and create new opportunities for economic growth and employment at home. This is the challenge before us," he added.
Referring to the recent government action to raise price of petroleum products and capping supply of subsidized cooking gas cylinders, Singh said the government is conscious of their effects on poor people. “We will take all possible measures to protect their life line needs," he said.
Referring to recent reform measures announced by the government, the Prime Minister said, “We bit the bullet and did what we felt was the right thing to do. Undoubtedly, more needs to be done."
He further said one of the major negative features of the present situation is that many infrastructure projects are stuck because of the delay in granting various clearances and the non-transparency in determining the conditions under which clearances can be given.
“We are looking at ways to speed up clearance processes and making them more transparent," he said.
Ramping up of investment in infrastructure, Singh said, is critical for reviving the growth momentum.
The 12th Plan (2012-17) envisages an investment of about $1 trillion, and the government expects half of it to come from the private sector.
“Investment in infrastructure has to be in the vanguard of public investment for many years to come and we are working in that direction... We have set ambitious targets for the infrastructure sector and ministries are being monitored regularly to see that they perform as expected," Singh said. PTI
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