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Govt to modify policies to meet investors' expectations
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SME Times News Bureau | 06 Aug, 2012
Finance
Minister P. Chidambaram Monday said the government will fine-tune
policies to meet investor expectations, cut fiscal deficit and revive
growth.
"Our policies have to be modified or fine-tuned in order
to meet the expectations of different stakeholders," Chidambaram said
during his first media interaction after assuming the charge of finance
portfolio.
Chidambaram unveiled a roadmap to revive growth by boosting investment.
"The
key to restart the growth engine is to attract more investment, both
from domestic investors and foreign investors. Since investment is an
act of faith, we must remove any apprehension or distrust in the minds
of investors," he said.
"We will improve communication of our
policies to potential investors. The aim will be to remove the perceived
difficulties in doing business in India, including fears about undue
regulatory burden or regulatory over-reach," the finance minister said.
Chidambaram
said Indian companies, especially public sector enterprises which have
large cash balances, would be encouraged to restart investment.
"Proposals pending with the Foreign Investment Promotion Board will be
processed and decisions taken expeditiously."
In an apparent
reference to the controversial amendments in taxation norms, especially
the General Anti-Avoidance Rules (GAAR), and retrospective changes in
tax legislation introduced by his predecessor Pranab Mukherjee,
Chidambaram said the government will fine-tune these policies to
reassure investors' confidence.
"Clarity in tax laws, a stable
tax regime, a non-adversarial tax administration, a fair mechanism for
dispute resolution, and an independent judiciary will provide great
assurance to investors," he said.
Chidambaram said the government
will soon unveil measures to bring more discipline in spending and
return to the path of fiscal consolidation. "We intend to unveil,
shortly, a path of fiscal consolidation," he said.
The finance
minister said he has formed a three-member panel to assist the
government in formulating the path of fiscal consolidation. "We expect
that the work will be completed in a few weeks."
On inflation, Chidambaram said the government would work with the Reserve Bank of India (RBI) to tame inflationary pressure.
"Non-food
inflation is already declining. We are confident that inflation can be
moderated in the medium term. Fiscal policy and monetary policy must
point to the same direction and must move in tandem," he said.
Earlier in the day, RBI Governor D. Subbrao met the finance minister and both discussed the macro-economic situation.
The finance minister said he was confident that India will get back to a path of high economic growth.
"I am confident that we will prevail and we will return to the path of high growth."
He said the country faced similar economic problems in 1991, 1997 and 2008, and overcame these successfully.
"It
is widely acknowledged that today the Indian economy is stronger and
better prepared to face the challenges. Moderate growth in two out of
eight years should not dent our confidence," said Chidambaram.
India's
economic growth slumped to nine-year low of 5.3 percent in the quarter
ended March. For fiscal 2011-12, India's GDP expanded by 6.5 percent,
substantially down from 8.4 percent growth registered in the previous
year.
The growth is likely to remain sluggish in the current
financial year as well. The Reserve Bank of India last week lowered its
growth outlook to 6.5 percent.
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Customs Exchange Rates |
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