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What is hurting the India growth story

February 18, 2014 08:40 IST

What is hurting the India growth story

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Accusing the Opposition of adopting a confrontationist stance, Commerce and Industry Minister Anand Sharma on Monday said India's growth story has suffered due to negative narrative that dissuaded foreign investors.

"India's story has been hurt by a negative narrative which actually dissuaded the foreign partners.

“Many progressive policies including FDI in retail and civil aviation and legislations such as the Insurance Bill have been opposed by those who claim to support economic development and growth.

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Interim Budget 2014-15: Complete Coverage


Photographs: Reuters

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"Positions taken by the Opposition party have been unnecessary confrontational and populist," Sharma said at a Confederation of Indian Industry event on the budget.

Referring to tax cases involving Vodafone, Nokia and Shell, Sharma said policies must have continuity and predictability.

The tax and regulatory regime should also have predictability.

It is unpredictability which is bound to have a very negative spin-off which needs to be avoided, he added.

"The revenue side is that they have to collect taxes where it is due.

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Interim Budget 2014-15: Complete Coverage


Image: P Chidambaram.
Photographs: Reuters

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“At the same time we do not believe in giving an impression that we subscribe to the concept of retrospective taxation.

“I for one am firmly opposed and will continue to oppose it, that this is not correct," the minister said.

On failing of conciliatory talks with UK telecoms major Vodafone, he said it is "really sad".        

However, Sharma said the issue has not weaned away international investors and they shall continue to remain engaged in India.

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Interim Budget 2014-15: Complete Coverage


Photographs: Reuters

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The government has decided to withdraw the conciliation offer to Vodafone to resolve the Rs 20,000-crore (Rs 200-billion) tax dispute case and collect the dues after the telecom firm insisted on bringing in transfer pricing disputes within the ambit of negotiations.

On the Foreign Trade Policy, Sharma said all the incentives will continue until a new one is made by the future government.

"So you can safely say that that the five year period was predictable when it comes to FTP (announced in August 2009) and hopefully nothing will change until its completion in August 2014," he said.

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Interim Budget 2014-15: Complete Coverage


Photographs: Reuters

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Welcoming the proposed excise duty concessions, the minister said the automobile sector including the component segment and capital goods will pick up.

Sharma was confident that India will maintain the tempo in export growth. The government expects to end the year with exports of over $326 billion.

On India Inc's concern on tax related issues with the revenue department, he said industry is in regular interaction with him and the Finance Minister.

"Surely there cannot be any excessive action and there cannot be any over-reach which is not desirable," he assured.

Interim Budget 2014-15: Complete Coverage


Image: A college girl gets her eye painted in tri-colours of India's national flag.
Photographs: Ajay Verma/Reuters

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