“No longer necessary for people with surplus money to seek greener pastures abroad”
“Better late than never. I welcome it,” Prime Minister Manmohan Singh said reacting to questions on Pakistan's decision to confer Most Favoured Nation Status on India. “This should have happened 17 years ago!” Dr. Singh exclaimed. “As one who believes that, rightly or wrongly, the destinies of countries in South Asia are very closely linked, I welcome the decision of Pakistan to grant us Most Favoured Nation treatment.”
The Pakistan Cabinet on Wednesday decided to grant MFN status to India, but later it gave confusing signals by saying that it was only a move for normalisation of bilateral trade relations that would “culminate” with MFN.
The Prime Minister said India granted Pakistan MFN status way back in 1996 but Islamabad failed to reciprocate the gesture because of opposition from Pakistani trade lobbies and religious and hard line political parties, which felt such a move could harm their country's stand on the Kashmir issue.
With the G20 speaking out on the need to eradicate tax havens, Dr. Singh also called for creating an environment where Indians feel encouraged to invest in their own country and no longer feel the need to squirrel illegal funds abroad. India was a land of opportunities and it was no longer necessary for people with surplus money to seek “greener pastures” abroad. This was the only way governments could hope to discourage tax havens.
Asked how long it would take the government to bring back money parked abroad by Indian nationals, Dr Singh said “I am no astrologer”, but added that India was dealing with sovereign countries who chose the extent to which they cooperated with India. “We are trying to negotiate agreements on tax information exchange with more and more countries. This is still in progress,” Dr. Singh said.
The Prime Minister indicated that he was unaware of the extent of Indian black money abroad and whether India had a “fool proof mechanism” to recover it.
Conceding that “inflation is a problem,” Dr. Singh suggested that the phenomenon of rising prices was the reflection of increased demand. “Our national income is increasing at the rate of 8 per cent per annum and population at the rate of 1.6 per cent per annum. So the per capita income of the country is growing at 6.5 per cent to 7 per cent. It is bound to lead to a more diversified food basket,” he added.
Questioned about his meetings with world leaders, Dr. Singh brushed aside queries on his failure to meet President Sarkozy saying he had had a “good chat” with German Chancellor Angela Merkel whom he described as a “good friend who recognises that Europe's problems stem from the Eurozone's lack of a lender of last resort.” Dr. Singh is greatly respected both as an economist in his own right and as the architect of India's liberal reforms and the fact that the host Nicolas Sarkozy put off meeting him is a matter of significance. Political observers do not rule a possible like to the sale of Rafale fighter jets to India, suggesting the deal may not have materialised for France.