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BW Businessworld

Prime Minister Modi Promises Stable Tax Regime, More Reforms

Says steps have been taken to simplify processes and rationalise provisions regarding licences, security and environment clearances

Calling Make in India as the biggest brand ever created in the country, Prime Minister Narendra Modi on Saturday (13 February) promised investors a predictable and transparent taxation regime and simplified licensing and clearance processes.

"We will not resort to retrospective taxation; we are making our tax regime transparent, stable and predictable," he said. "We are also simplifying processes like licences, security and environmental clearances," said Modi, while addressing heads of state, a battery of business leaders and foreign delegates at the launch of 'Make In India Week' in Mumbai.

"This (Make In India) brand has captured imagination of institutions, industry, individuals and media....It reflects our collective desire and is forcing us to make corrections and increase efficiency.

"India is one of the most open countries for FDI," Modi said, adding that FDI inflows have gone up by 48 per cent since this government came to power in May 2014.

"We want to make India a global manufacturing hub," he said, adding there is an all-round emphasis on 'ease of doing business' now.

"India is blessed with 3 'Ds', Democracy, Demography and Demand, to this we have added another D, Deregulation," the PM said.

Changes are taking place at state level too and there is healthy competition among states in ease of doing business and boosting infrastructural linkages, he said.

"In 2014-15, India contributed 12.5 per cent to global growth. Its contribution to global growth is 68 per cent higher than its share of world economy," he said.

"India has consistently been ranked as the most attractive investment destination by several global agencies and institutions. Our young entrepreneurs are showing us newer and faster ways for enterprise and delivery and my government is committed to support them.

"My friendly advice to industrialists : Don't wait. Don't relax. There are immense opportunities in India," he said.

The Make in India Week is aimed at attracting investments into the manufacturing sector and showcasing success stories at a specially-created venue at the BKC business district in Central Mumbai.

Modi was confident that this year India will record the highest-ever coal production.

"I believe in minimum government and maximum governance.

Therefore, almost on a daily basis, we are trying to remove the bottlenecks that were affecting investments and growth," Modi said.

The Prime Minister also said the government is investing in social, industrial and agricultural infrastructure to provide better income and quality of life to people.

"So far, it was our implementation capacity that was the biggest bottleneck. We have speeded up processes. The result is faster turnaround of projects," Modi said, adding that to step up financing, "we are trying innovative ways. We are opening up our greenfield and brownfield projects for public-private partnership. With strong fiscal discipline and by plugging leakages, we are trying to provide more resources for infrastructure".

India has also set up the National Investment and Infrastructure Fund and has come up with the mechanism of tax-free infrastructure bonds for projects in rail, road and irrigation sectors.

"We are working with a number of countries, financial markets and funds on these financial instruments," he said.

"India is a land of immense opportunities. Fifty of our cities are ready to set up Metro Rail Systems. We have to build fifty million houses. The requirement of road, rail and waterways is enormous. There is no time for incremental changes. We want a quantum jump," he added.

The government, has also decided to do this in "a cleaner and greener way".

Further, he said the domestic industry and investors are feeling much more confident and optimistic in spite of an uncertain global situation.

"When we started the Make in India campaign, manufacturing growth in the country was 1.7 per cent. This year, it has improved substantially. In the current quarter, manufacturing growth is expected to be around 12.6 per cent," Modi said.

"There are immense opportunities in India. You should take advantage of the renewed interest of global players to work in India. Many of them are looking for technological and financial collaborations with Indian partners... I assure you that if you take one step, we will walk two steps for you," the Prime Minister said.