“Once he’s done foreign investments will start flowing in”
Prime Minister Manmohan Singh is on the job of taking forward the country’s development agenda and will put the country back on the growth path in a month or two, Union Minister for Corporate Affairs M. Veerappa Moily said here on Monday.
At an interaction organised by the Confederation of Indian Industry – Coimbatore Zone, he said the Prime Minister was working towards removing negative sentiments over the proposed amendments to the General Anti-Avoidance Rules (GAAR). Once this was done, Foreign Institutional Investments and Foreign Direct Investment would start flowing in.
Mr. Moily said he had initiated an exercise to build a National Business Index based on economic indicators and not perceptions.
The government had to act when the black money issue was raised and the need for amending GAAR was felt. It was aware that 55 per cent of the FII and FDI (money) came through ten countries, including the Mauritius-Singapore-Cyprus route. Only 19 per cent of the FII and FDI came through ten other nations, including the U.S. and the European nations. He said that when the authorities became “suspicious of round tripping,” particularly through the Mauritius route, the Union government responded with certain amendments.
On “certain negative observations” by some international rating agencies, Mr. Moily said there could be some merit in what they have said, but called for a balanced view. India should have gone along with fiscal reforms, process reforms and human resource development and reforms building systems for capacity building. This should have been done in 1991 when the liberalisation was introduced by Mr. Singh when he was the Finance Minister. India missed the opportunity then and now the process has been restarted, Mr. Moily added.
The fall in growth rate to 6.5 per cent is often talked about, but there were countries with a lesser growth rate. The government was working towards achieving a growth rate of nine per cent. Its falling to 6.5 per cent was not a weakness, when compared to the lowest growth rate of many other countries.
Lauding Coimbatore for its pioneering role in many spheres, including corporate social responsibility, Mr. Moily said that Coimbatore had been a source of inspiration for him in vibrant entrepreneurship and for many initiatives his Ministry had embarked upon. He told industrialists that there was no doubt that the economy’s growth had to be fast-tracked, but the growth would have to be inclusive. He pointed out that one per cent growth in literacy would translate into one per cent increase in Gross Domestic Product.
Chairman of CII-Coimbatore Zone Ashok Bhaktavatchalam, G. Ramasamy, Council Member of The Institute of Chartered Accountants of India, and S.K. Sundararaman, Vice-Chairman of CII Coimbatore Zone spoke.