New York, June 19:
Wooing investors in the US, India’s Finance Minister Arun Jaitley on Thursday said economic reforms being currently shaped through the legislative process can push India’s growth rate above 7 to 7.5 percent range.
“Neither the government, nor the people, nor the industry whose representatives, some of whom are here, nobody is very excited about a 7-7.5 percent growth rate in India,” Jaitley said here at the Council on Foreign Relations (CFR), a leading think tank.
“Because a series of reform fixes which are in the pipeline and are to be implemented, we have now identified all the problem areas,” he said in a conversation with Timothy Geithner, president of investment firm Warburg Pincus.
“I think one by one as we go resolving most of them, hopefully we should reach what our destination targets are,” Jaitley added.
Earlier on Thursday, he told the Wall Street Journal: “The India story can now be brought back to centre stage. We were falling off the radar.”
“Important changes” are being made in government policies every week, said Jaitley, who is on a nine-day visit to New York, Washington and San Francisco where he will meet investors and chief executives.
Overhauls are moving ahead at “a rapid pace” and “there’s a lot of agenda still to cover,” Jaitley said.
He also expected Parliament to take action on measures to simplify the country’s tax regime.
The government, he said, is looking for compromises that would speed up passage of a new law aimed at easing the acquisition of land for development projects.
Referring to tax notices issued to foreign investors to retroactively pay a tax, known as the Minimum Alternate Tax (MAT), Jaitley said the tax notices were a legacy of a 2012 litigation and would be reviewed by the Indian Supreme Court.
“Once that judgment comes, MAT will get sorted out,” he said.
Jaitley noted that the government has enacted a law saying MAT won’t apply to foreign institutional investors from April 1, 2015.
With Jaitley allaying concerns of American investors that India will not make retrospective tax demands, the US-India Business Council (USIBC) on Friday said the first year of the Narendra Modi-led government has seen a positive response “from investors across the board”.
“The past year has seen a positive affirmation for Prime Minister Modi’s ‘minimum government, maximum governance’ agenda from investors across the board,” Mukesh Aghi, president of USIBC, said at a reception here in honour of the finance minister organised by the business chamber.
“The council and its membership eagerly await the passage of critical legislations in the areas of taxation and the Land Acquisition Bill,” he added. (IANS)