Finance Minister P. Chidambaram on Tuesday said general elections are 15 months away and the Budget to be presented in February will be “responsible”.
Addressing global investors, on the fourth leg of his overseas road-shows that began last week, he said the government will implement many of the decisions and changes in the run-up to the polls.
Mr. Chidambaram said during the meeting investors expressed reservations over political stability and capacity of the government to take reforms forward. They pointed out that elections are due in 2014 and “will we falter in the run-up to the elections“.
“I assured them that the polls are 15 months away and that the Budget that will be presented in February will be a responsible Budget, that we will implement many of the decisions and changes in the run-up to the polls,” he told reporters after the meeting.
Mr. Chidambaram said there is no reason for the investors to doubt that “in the run-up to the polls we will be anything but responsible”.
Mr. Chidambaram said if one went by the number of people attending the conferences and questions they asked, it clearly showed there was enormous interest in and goodwill for India.
Both in Frankfurt and London, the investors want India to recapture what it achieved between 2004 and 2009.
“I sincerely hope that these road-shows have helped to answer their questions, clarified their doubts and stimulate interest in India,” he said.
Vodafone tax issue
Mr. Chidambaram expressed confidence that the government will find a resolution to the Vodafone tax issue.
He said that the issue figured only peripherally and came up as a question.
“I did clarify to them that Vodafone has formally offered to engage with the government of India in discussions. They had two rounds of discussions with the officials of government of India.
“I am confident that we will find a resolution to the Vodafone issue so that we can put it behind us and move forward,” he said.
Vodafone has been slapped with an income tax demand notice of Rs. 11,200 crore on its 2007 acquisition of Hong Kong-based Hutchison Whampoa’s stake in its Indian telecom business.
The liability arose following the then Finance Minister Pranab Mukherjee amending the Income Tax Act, 1961 with retrospective effect to undo the Supreme Court judgement that had ruled in favour of the company.
The government is working towards a solution based on recommendations of the Shome panel which suggested that either the government should withdraw the retrospective tax amendment or waive the penalty in case it had to recover the taxes.