WEF: Jaitley allays investor fears over India’s tax regime

Finance minister Arun Jaitley has sought to remove foreign investors' misconceptions about India's taxation policy, saying that India is not, and has never been, a high-tax economy.

Speaking at the World Economic Forum 2015, the minister said India, on the other hand, is an investment destination that has a ''lot in the pipeline'' for global investors.

Addressing global investors at a session in the World Economic Forum at Davos, addressed at a session in Davos, Switzerland, Jaitley said the government is in the process of opening new avenues for global investors.

He said the government is considering attracting foreign investment in the proposed small payment banks. The government is also looking at ways of attracting more NRI investors an issue under consideration, he said.

Referring to the 'Make in India' policy being pushed by the government, he said, "India has to learn the art of low cost manufacturing from china."

Jaitley, who is leading a government delegation to the World Economic Forum, said his government has a mandate to move fast and is moving at a rapid pace to remove hurdles to investment and growth, adding that the government and the Indian state have now united into one to welcome investment.

Asserting that India is not a high-tax economy, Jaitley said, he was hopeful of getting the legislation on the goods and services tax (GST) passed in the next session of Parliament.

He said the Indian government also did not follow an adversarial tax policy, although the government has to address some legacy issues - both in relation to stability of tax policy and taxing of global businesses.

Jaitley said the government will not resort to sovereign power of retrospective taxation. In fact, he said, the government is in the process of creating procedures for advance rulings on tax liabilities.

"It is not easy to withdraw any tax till we balance our book," he added.

Jaitley said India's real growth potential is over 9 per cent and the government is attuning policies to take India in that direction, adding that if the government continues to take decisions at the current pace, India will grow much faster.

The minister also acknowledged the beneficial effect of low oil prices and low food prices that have helped in maintaining low inflation rate.

Replying to media queries on India's economic relationship with the United States, Jaitley said, it is continuing to progress well.

"We want greater understanding from US on regional issues," the finance minister said.