FICCI fears reaction post-Vodafone verdict

“I fear it. I like to caution against it. The government’s current fiscal situation is such and they have so much of constraints on revenues. This entire psychology that revenues might (get affected) might lead to such kind of decisions,” he said.

The Supreme Court ruled on Friday that Vodafone does not have pay Rs 11,000 crore tax. The judgement came at a time when the government is grappling with shortfall in its budgeted receipts amid economic slowdown.

Kanoria said that there is a positive in the judgement.

“Vodafone case is a mood changer… India has demonstrated that its legal system is in place. Justice can still be doled out,” he said.

Regarding the Vodafone case verdict,experts had opined that the government may not go in for the review of the judgement as the apex court had already discussed the issue thoroughly but the proposed Direct Taxes Code Bill provides for general anti-avoidance rules.

The ruling has implications for some other multi-nationals including SABMiller,Sanofi Aventis,Kraft Food and Vedanta,which have entered into M&A deals similar to that of Vodafone.

On the pace of economic reforms,the Ficci chief said the government needs to develop a clear vision. “Uncertainty needs to be removed. Decisions need to be taken faster. I would urge the government to send out clear signals as to which priority areas the government really works towards,” he noted.