UK-based Vodafone Group on Wednesday expressed the hope that the new government would set in reforms that would help improve the ease of doing business in India and does not rule out finding a solution to the Rs. 11,200 crore tax dispute outside arbitration.
On a short visit to India, Vodafone Group CEO Vittorio Colao told the media that the outlook in the country has changed after the elections and he felt the Modi Government was pro-business.
Though the Group was not obsessed in buying companies in India, it was keeping its mind open on the issue and also on mergers and acquisitions. Still he would describe the scene about the upcoming spectrum auction as one that creates uncertainties.
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“I think the mood of investors with the new government of India is positive because the intentions are good. My recommendation is make sure that political intentions (are) translated into administrative acts,” he said.
On the tax dispute with the government, he said, there is a process which is a kind of civilised process that has been established between nations and companies to resolve disputes.
“That’s great and we will just follow the process...The problem in India is slow and some tines contradictory to the speed of the regulatory process. There is an arbitration process, we think the process can happen,” he said.
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Asked whether Vodafone can enter into an agreement with the government directly on the issue, he said, “You can never rule out anything in an arbitration process because it is a mechanism for finding a private solution to the dispute. So nothing can be ruled out.”
To another question if arbitration process has started, Mr. Colao said it was in a preliminary stage.
Asked whether Vodafone was disappointed that the new government left the tax dispute as it is in the first budget, Mr. Colao said he was not disappointed.
Vodafone, which is facing a tax liability of over Rs. 11,200 crore along with interest on its 2007 acquisition of Honk Kong-based Hutchison Whampoa’s stake in India’s telecom major Hutchison Essar, said the private sector can deliver provided simple rules are framed, enough resources provided and quick decisions taken. To another query about the Vodafone tax dispute and the new government’s approach, Mr. Colao said, the retrospective taxation has really backfired in India.
“Do I see this govt as a pro-business govt, absolutely yes. The international community and media is positively inclined towards this...This will be amazing change. Mr. Modi and his government can really make. I am waiting like many international investors to see the new India. It is not the first 100 days, it’s the first 1000 days, I am hopeful,” he said.
Mr. Colao said industry needs simple rules, enough resources and quick decisions. “So I think some of the steps India has made are in the right direction for the investors,” he said.
Asked about the Digital India programme of the government, he said it is great but it will also have to get very good participation from the private sector.
“All these issues are well but they should not just be the initiatives from the government... It is really creating the conditions for the private sector to invest and we want to invest to serve the customers... Issues like spectrum are important and then trust the private sector and you can see private sector will deliver,” Mr. Colao said.
The company has invested Rs. 70,000 crore in India so far and has 92 million rural customers, he added.