"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."
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 taxations measures like 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 captains of India Inc at the Economic Times Award function here.
Admitting that certain tax measures like 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 financial year, Dr Singh said the Indian economy has been affected by the global slowdown and this has dampened the investor sentiment.
“Growth decelerated to 6.5 per cent last year and may be only around 6 per cent 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 subsidised cooking gas cylinders, Dr 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.