Expressing concern over the current global economic scenario,Finance Minister Pranab Mukherjee on Friday said the G-24 nations will focus on job creation and effective social protection for the poor and the vulnerable.
Addressing a press conference at the G-24 nations finance ministers meet here,Mukherjee said: We will focus on job creation and on effective and affordable social safety nets that protect the poor and vulnerable. We call for the timely and full delivery of the Official Development Assistance (ODA) commitments to the low income countries (LICs).
Speaking on the current economic condition of the world,Mukherjee said that though policy actions have reduced the threats from the Euro area,but downside risks remain high,including from high and uncertain oil prices.
We remain concerned about the fragility of the recovery. Recent policy actions have reduced threats from the Euro area,but downside risks remain high,including from high and uncertain oil prices. The subdued global growth has adverse impact on growth in many emerging markets and developing countries. We believe that immediate and concerted actions are needed to restore confidence and boost growth, said Mukherjee.
Stressing on forward-looking commitments on International Monetary Fund (IMF) quota and governance reforms,Mukherjee said they must be timely and fully met.
On the international financial institutions,we stress that the forward looking commitments on IMF quota and governance reform must be met on a full and timely basis. We welcome ongoing efforts to ensure that the IMF has the necessary resources to play its role,but it should remain a quota based institution, he stated.
Calling for new solutions to enhance the financial capacity of the World Bank and International Financial Corporation (IFC),Mukherjee added that these institutions should improve its responsiveness by flexible and innovative policies and instruments.
We are concerned that World Bank lending is projected to decline at this crucial juncture because of constrained financial capacity. We therefore call for new solutions to bolster the financial capacity of the Bank and IFC. We also urge the Bank to improve its responsiveness through more flexible and innovative policies and instruments, added Mukherjee.
Pranab Mukherjee on importance of developing economies as growth drivers
Mukherjee on Friday said the developing and emerging economies would continue to play the role of growth drivers for the world.
Mukherjee,who was addressing the BRICS finance ministers here,said: Developing countries and emerging economies are expected to continue as growth drivers for the world economy.
Expressing confidence in Indias economic health,Mukherjee further said that Indias underlying growth fundamentals remained firmed despite adverse conditions prevailing in the external environment.
As far as India is concerned,despite adverse conditions prevailing in our external environment,we are reasonably confident that the underlying growth fundamentals remain firm.
We are intent on ensuring that the process of fiscal consolidation gains further momentum,with monetary policy remaining vigilant in dealing with inflationary pressures, said Mukherjee.
Highlighting the importance of the upcoming G20 summit in Mexico,Mukherjee told the BRICS ministers that a credible and ambitious should be put in place to bring back the world economy on the path of recovery.
We need to ensure that the plan adopted by our Leaders is both credible and ambitious enough to put the global economy firmly on the path of recovery over the short run,and promote strong,sustainable and balanced growth and job creation over the medium to long-term, he said.
To achieve this target Mukherjee put forward three points to be focused upon.
Firstly,the need to develop a framework to assess the progress made on G20 commitments.
Second,concerns over the global employment scenario,especially the falling labor participation rate and growing youth unemployment in advanced countries,need to be addressed.
The third point,the need to step up efforts to support investment in the real sector,and especially in infrastructure,to help revive global growth and support demand and job creation.
India-US relations on strong footing: Mukherjee
Mukherjee said the relations between India and the United States have evolved in recent years into a global strategic partnership,based on shared values and increasing convergence of interests on regional and global issues.
He said that relations between two countries has deepened and grown across a broad range of areas. Mukherjee was speaking during the bilateral meeting between India and US when he met the US Treasury Secretary Timothy Giethner in the latters office in Washington D.C. yesterday.
Mukherjee further said that the political and strategic engagement between India and US,including defence,counter-terrorism,trade,investment,science and technology,education,and energy was at an unprecedented level.
During the meeting,both the leaders discussed bilateral economic and financial cooperation as well as the recent developments in the global economy.
The officials at the Indian Mission in Washington DC informed that US Secretary Geithner and Mukherjee discussed the broad range of global and bilateral macro-economic and financial issues relating to foreign investment and tax matters.
While discussing tax issues,Geithner mentioned about certain amendments proposed in tax provisions of Indias Income Tax Act with retrospective effect. In this regard,Mukherjee informed that the tax changes proposed are not substantive but clarificatory in nature as the changes reiterated only the intent of the legislation.
During the meeting,it was also pointed out that as per Section 149 of the Income Tax Act,no tax cases can be opened beyond six years. It was also informed that tax cases which have already been assessed and finalized up to April 1,2012 cannot be reopened.
Further,the Indian tax laws are very clear that the companies making capital gains from the assets located in India will have to pay taxes either in the country of their origin or in India. It is not a case of double taxation but ensuring that companies that are liable to pay tax must pay some tax.
On the issue of categorization of software sales as royalties,it was informed that discussions have been held in the past between the tax authorities in both the countries and they had agreed to disagree on such characterization.