Need to reduce cost of doing business: Jaitley

'External sector vulnerabilities a threat'

There is a need to reduce the cost of doing business in the country to revive the investment cycle, Finance Minister Arun Jaitley has said.

“The Finance Minister stressed the need to improve the business climate and reducing cost of doing business as important means for revival of the investment cycle,” an official statement said on Tuesday.

He also emphasised the need for coordinated approach by all sector regulators to achieve financial stability.

“He referred to the high political expectations from the new government and the opportunity now available for resolving long-pending problems facing the economy,” the statement said.

Jaitley was speaking at the meeting of the Financial Sector Development Council (FSDC) on Saturday. It was attended by financial sector regulators including the Reserve Bank Governor Raghuram Rajan and Sebi Chief U K Sinha.

The minister also cautioned against slackening the vigil in the area of fiscal consolidation.

Finance Secretary Arvind Mayaram briefed the council on the macro-economic situation and improvement in twin deficits.

“However, there is a long way to go in terms of reviving economic growth, controlling inflation especially food inflation, keeping deficit under control, addressing infrastructure bottlenecks,” Mayaram said.

He added that there is a need to continue to be in a state of preparedness for managing external sector vulnerabilities.

Reversing slow growth 

During a pre-Budget meeting with economists late on Tuesday evening, Jaitley said he is committed to reversing the trend of slow economic growth along with putting a tight leash on rising inflation.

“The slowdown in economic growth coupled with high inflationary pressure poses a challenge to the macroeconomic environment. The government is committed to reverse this trend and take things on a positive path,” Jaitley said.

Major suggestions made by the economists included doing away with retrospective tax amendments, removal of all kinds of cess and surcharges and increase in rate of taxes if so required.

Some of the economists also demanded removal of dividend distribution tax and introduction of inheritance tax above certain threshold limit as in case of many other capitalist countries, a finance ministry statement said.