Pitching for more foreign investments, Finance Minister Arun Jaitley on Sunday said India would give better returns than many other countries and assured that the government is working to expeditiously resolve tax disputes involving three overseas companies. Jaitley, who is here to meet foreign investors and fund houses, emphasised that the government wants to resolve expeditiously the entire instability on the taxation matters as “tax uncertainty does not help the investment environment”.

Noting that the government is putting special focus on improving ease of doing business, the Finance Minister said foreign investments can give great additional resources and the country’s infrastructure sector needs huge investments. “India will give better returns than many other countries,” Jaitley said here, addressing investors and business leaders.

On the second leg of his visit to Singapore and Hong Kong, he said the government is keen on early resolution of the three pending tax disputes — involving foreign giants Vodafone, Cairn and Shell — and the best way to get an expeditious disposal is being worked out. In reply to a question on the outstanding tax disputes and his recent comments that a resolution is close by, Jaitley said, “We inherited a legacy of several tax disputes. Perhaps, this was one of the tougher challenges we had.” “The best way to get an expeditious disposal is being worked out, these are related to the companies you have mentioned. I am seized of the matter and we are very eager to reach a resolution,” he said during his media interactions.

Jaitley stressed that a sound policy is to concentrate on real economy rather than being just impacted by what external factors do to the market. Ahead of the monetary policy review later this month, Jaitley also made a strong case for a rate cut. He said monetary policy plays an important role in stimulating growth and is hopeful that RBI would appropriately act with a sense of responsibility on this front.

Industry has been pitching for further reductions to lower the cost of capital to stimulate growth. Looking to attract more overseas investors, he said Digital India and Make in India (initiatives) are designed to give special boost to manufacturing and India has huge potential in these areas.

On concerns that the reforms pace has turned slow, Jaitley said, “I don’t share that perception because the government has been moving very consistently on its reforms agenda with a clear-cut direction.” “There are one or two decisions that the Opposition is trying to block, but we will either push those decisions on the strength of our Parliamentary numbers or we will follow an alternative route to achieve the same objective,” he added.

“But then, if your own systems are strong and in order, then your ability to restore normalcy as far as optics of the economy is concerned is much better. Therefore, the sound policy is to concentrate on real economy rather than being just impacted by what external factors do to the market,” Jaitley noted. According to Jaitley, international investors are showing great interest in railways-related areas. Meanwhile, he said the government is very keen to see the border dispute getting resolved expeditiously and India’s border with China has been “far more peaceful” than the western borders.

On border issues, Jaitley rejected the suggestions that it’s proxy war-like situation. “I don’t think that is the correct expression to use. There is a border dispute and there is a mechanism in place since 2003 in order to look at that dispute,” he noted. “We will be very keen to see that the border dispute is resolved very fast. In fact, the border with China has comparatively been far more peaceful than our western border itself,” he said. On opportunities for India to attract FDI after China slowdown, the Finance Minister said, “I see an important opportunity for India and I see that opportunity because the relative slowdown in China does not impact India as such.”

Later in the evening today, Jaitley addressed the members of the Indian Chamber of Commerce, Hong Kong as well as the Indian community here. He thanked them for showing renewed interest in India growth story and said the country should see growth better than 7.3 per cent seen in the last fiscal. The Minister also assured them of the continued focus on reforms. The Finance Minister, along with a large business delegation from India, had meetings with institutional investors. Jaitley would address the APIC-India Capital Markets and Institutional Investors Summit here tomorrow in his first visit to this global financial centre as India’s Finance Minister.

The Indian Express
18th September 2015

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Written by Shreya Patil