Indian finance minister Arun Jaitley is wooing American investors with twin assurances — more economic reforms and a stable policy regime with no intention to legislate or apply laws retrospectively.
Jaitley has held talks with US treasury secretary Jacob Lew, commerce secretary Penny Pritzker and US trade representative Michael Froman in Washington and met investors, including some CEOs on a one-on-one basis, and New York.
In his interactions with investors, the finance minister told reporters in Washington on Saturday, he had explained the progress on the reforms front since the Modi government came to power last year and all those in the pipeline.
“The government is determined to continue on the reform path to give a further boost to the economy,” he said outlining “several game changing steps” including opening up, structural changes, subsidy rationalisation and direct taxation reform.
Goods and Services Tax (GST) regime was “probably the most important tax reform,” undertaken by the Modi government, he said.
Jaitley, who is headed to San Francisco Sunday to meet more investors, said he was “carrying back a clear message that investors need a stable policy regime as unpredictability is never investor friendly.”
“In an otherwise troubled times of the global economy, India clearly is a bright spot,” with an 8 percent growth target this year, said Jaitley.
“In the current global climate that makes India a reasonably attractive destination.”
On retrospective taxes, an issue that he faced at practically every event, Jaitley held out an assurance that the Modi government does “not intend to legislate retrospectively or apply laws retrospectively.”
Describing tax notices issued to some foreign firms to pay taxes retrospectively under a law passed in 2012 by the previous government as a “legacy issue”, Jaitley said he hoped “to put a quietus to the whole issue” with the expeditious disposal of pending cases by the courts.
In his talks with US officials, the minister said he had raised India’s concern about reaching a Totalisation Agreement “so that our professionals could get the benefits which have otherwise been denied to them.”
Such an agreement would help Indians working in the US to avoid double taxation of income with respect to social security taxes.
On their part, the US had made references “to their concerns with regard to intellectual property regulations in India,” Jaitley said.
Other topics of discussion included continued efforts to reach a bilateral investment treaty, increased trade cooperation and preparations for the India-US economic dialogue.