Modi assures CEOs of better tax system

Modi assures CEOs of better tax system

Modi assures CEOs of better tax system

Assuring CEOs at the Indo-US Business Summit here on Monday of a completely different business environment that matches their expectations, Prime Minister Narendra Modi promised to provide a consistent policy regime and remove uncertainties in the tax system.

US President Barack Obama complimented his stance by pledging investments worth $4 billion but raised issues related to intellectual property rights and trade restrictions.

“You will find environment that is not only open but also welcoming. We will guide you and walk with you in your projects. You will find a climate that encourages investment and rewards enterprise,” said the prime minister.

“It will nurture innovation and protect your intellectual property,” he went on to add.

Modi said his government’s immediate target was to bring India into the top 50 destinations for doing business from a much lower rank at present.

“You will find a tax regime that is predictable and competitive. We have removed some of the excesses of the past. We will soon address the remaining uncertainties,” Modi said.

Taxation issues had snowballed into a major controversy after the United Progressive Alliance government tweaked a legislation in the 2012 Budget and brought in controversial decisions such as the general anti-avoidance rules (GAAR) and retrospective amendments in tax laws drawing criticism and spooking investors.

Most of the Indian and American CEOs participating in the summit, too, said that retrospective tax laws was a major impediment against investments coming to India.

In his address, Obama raised the issue of ease of doing business in India with special reference to streamlining trade barriers and cutting red tape.

The US president, however, said that India and the US were moving in the right direction but there were lot of untapped trade potentials that needed to be harnessed.

Obama said the $20 trillion US economy exported only 1 per cent of its global exports to India and imported only 2 per cent from the country. It is here that the US president said there existed a huge trade potential.

Obama also referred to the current bilateral trade worth $100 billion as compared to US-China trade of $560 billion.

“It can give you an idea of what potential India can unleash,” Obama said and extended a $4 billion government-backed investment and credit to Indian businesses.

Obama said that US Export-Import Bank would finance $1 billion in exports of “Made in America” products.

Besides, the US Overseas Private Investment Corporation would lend $1 billion to small and medium-sized enterprises in rural areas. The US president pledged another $2 billion for renewable energy projects in India.

Obama also cautioned those always looking at higher GDP numbers as the mirror of an economy’s performance. He said growth of an economy cannot be measured only in GDP figures and bottom line of balance sheets.

Modi said, as the two largest democracies in the world, India and the US had a fundamental stake in each others success.

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