Govt to revive investor confidence: MSA

Montek Singh Ahluwalia indicated the investors will "soon see action" at the policy front.

Amidst a flurry of activities in the PMO and the Finance Ministry to clear air on contentious tax laws,Planning Commission Deputy Chairman Montek Singh Ahluwalia today indicated that the investors will “soon see action” at the policy front for reviving their confidence.

“I do feel that we need to restore investors confidence as said by Prime Minister Manmohan Singh. I am hopeful that you will soon see action on that,” Ahluwalia told reporters.

The Prime Minister’s Office (PMO) sought clarification from the Finance Ministry on various tax issues including retrospective amendments to the Income Tax Act,which had attracted widespread criticism.

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“PMO sought clarifications on taxation issues and Section 9 of Income Tax Act (it related to tax deals like Vodafone). We asked them to give us 2-3 weeks time,” said Finance Secretary R S Gujral who met the Prime Minister several times since yesterday.

Ahluwlia said,”It is always important for government to clarify because if investors are not clear,we should clarify. There is no question about that”.

Meanwhile,the Finance Ministry said it will shortly issue draft guidelines on the controversial General Anti-Avoidance Rules (GAAR),aimed at checking tax evasion.

“We have finalised the GAAR draft rules after three meetings with the stakeholders,” Gujral said.

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Earlier in the day,Cabinet Secretary Ajit Seth held a meeting of top bureaucrats of key economic ministries to take stock of the economic situation to firm up steps for arresting the slowdown in growth.

Hectic activities began since yesterday,a day after the Prime Minister directly took charge of the finance portfolio following resignation of Pranab Mukherjee,UPA Presidential candidate.

Stock markets too improved following change of guards at North Block.