Sunday, September 20, 2015

India will soon be ranked much higher on ease of doing business: Arun Jaitley

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, Finance Minister Arun Jaitley said on Sunday.
Finance Minister Arun Jaitley PTI photo

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, Finance Minister Arun Jaitley said on Sunday.

"The resolution can be by way of judicial tribunals, by way of discussions within or by way of some other methods that we have used in other cases," Jaitley said here.

"But I am certain (it will be resolved), because it is necessary to resolve these issues as tax uncertainty does not help the investment environment and therefore, we want the entire instability over the taxation matters to be expeditiously resolved," he said.

In reply to a question on the pending tax disputes involving Vodafone, Cairn and Shell and his recent comments that a resolution is closeby, 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 here.

Jaitley, who is here to meet foreign investors and fund houses on the second leg of his four-day visit to Singapore and Hong Kong, said the legacy issues the present government got included retrospective taxation, tax demand that was issued for prior periods and also the conflicting verdicts of various tribunals.

"You cannot have a common solution for all and therefore, each of those cases were dealt with separately. Some of them we tried to adjudicate, we had adjudications expedited. The government lost some cases and I accepted the verdict without going for appeal so that the issue gets resolved," he said.

Some of the cases were referred to an expert panel, which gave its report and the government accepted and implemented it, he said while referring to the MAT controversy and the resolution of the same.

"So that the uncertainty of the past is done away with, we now have about three issues pending before us and I am looking at all those three," the Finance Minister said.

On India being ranked very low in terms of ease of doing business, Jaitley said the country was ranked 140th when the NDA government assumed power, but there can be significant improvement now.

"Please wait for the next set of data and I am sure we will have some good reasons to smile because a lot of changes have taken place, not only at the Centre level but also at state levels," he said.

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."

"Idea is that the government must follow a clear path of reforms which can push the growth rates and the government must not dither. These things happen in all democracies, including the US, where even presidential proposals are blocked for years together. In India, it has happened only for a few months," he said.

Speaking on a wide range of issues, Jaitley said that if the US Federal Reserve had hiked the rate, it would have had a global impact and the markets would have been affected.

"That impact on the market does create an optical impression of some kind of a turmoil. But I am one of those who believes that we have learnt to live in the era of turmoil, whether it was Greece, or China or speculations about Fed rates. Everyday, something or the other impacts the market. As policy planners, we can not really hedge our bets as far as Fed rates are concerned," the Minister said.

According to Jaitley, his approach has been that rather than concentrate on what will happen in other economies and the impact of that on the Indian market, "we should concentrate on real economy in India".

"We should concentrate on our own policies, investments, our own growth targets and keeping our own inflation under control," he emphasised. "Markets will keep moving up and down. Even if change had taken place in the Fed rate, the market would have been impacted for some period of time and then would have stabilised...

"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.
Source - DNA

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