Modi’s stable policies talk is backed by Jaitley’s promise to junk retro tax

India will be made easiest place to do business, declares the prime minister

GN Bureau | January 12, 2015



 "We are planning to take a quantum leap,” prime minister Narendra Modi told the world on Sunday and very few can afford the luxury of doubt given the pace with which the government is moving.

The Vibrant Gujarat global summit was the platform and Modi announced that "we're trying to complete the circle of economic reforms speedily." Modi  said he was not only making announcements but planning to execute them with "concrete action" as the prime minister invited  global investors to India.

Modi mentioned how his government had opened 100 million bank accounts in just four months, allowing 100 percent foreign direct investment (FDI) in railways, allowing 49 percent FDI in the defense sector and 49 percent FDI in insurance sector.

The prime minister has been forced to make such hard pitch for investors as his government has not been able to push growth despite being in power over six months. India is still in its longest slowdown period. Modi aims to lift stagnant capital investment that has held back India's growth to 5.3 per cent.

Echoing the prime minister Modi’s promise to make India the 'easiest' place to do business with a stable policy and tax regime, finance minister Arun Jaitley on Monday reiterated the government's commitment in easing the way of doing business in India. Highly adversarial tax regime scared investors away and the government has no intention of using retrospective tax, Jaitley said.

The 7th Vibrant Gujarat summit this year has US, Britain, Japan, Canada, Holland, Australia, Singapore and South Africa as partner countries. Apart from these countries participating, other big names were the United State India Business Council (USIBC).

The US business delegation will be looking at a potential investment target of around $41 billion in India in the next 3-4 years. This was revealed in an informal survey done by the USIBC, which is bringing one of the biggest US business delegations, comprising 127 business leaders and 60 firms.

On the first day of the summit 30-odd memorandum of understandings (MoUs) worth Rs 2 lakh crore were signed which included a solar photovoltaic manufacturing cluster by Adani Enterprises Ltd with about Rs 25,000 crore investment.

The other major MoUs signed on Sunday include a Rs 7,900 crore investment promise by Welspun Group for an integrated steel manufacturing plant in the state and another Rs 5,500 crore MoU by Sintex Industries to manufacture plastics and niche products.

Welspun Renewables also signed two MoUs — 500 MW Wind & 600 MW Solar capacities — with Gujarat Urja Vikas Nigam (GUVNL) with an investment of Rs 8,300 crore.

Mukesh Ambani’s Reliance Industries announced Rs 100,000 crore investments in next 12-18 months  and Kumarmangalam Birla committed to an investment of about Rs 20,000 crore in Gujarat.

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