FM for steps to boost investor sentiment

The assertion came a day after the Finance Ministry cut withholding tax on overseas borrowings to 5 per cent from 20 per cent and approved the Rajiv Gandhi Equity Savings Scheme to attract first time investors to stock markets.

Stock markets cheered the announcement,with the BSE benchmark Sensex closing 404 points higher at 18,752.83 yesterday.

I am happy to note that the recent decisions taken by government have been widely welcomed,especially by markets and by important stake-holders in the market,” he said.

Underlining the need for clarity in tax laws,Chidambaram said lack of clarity in laws can create a great degree of instability in the environment which is not good for economic growth.

“And one of the most important contributor to stable environment is clarity in law,especially tax laws,fairness in tax administration,and non-adversarial approach to tax administration and collection of taxes and above all a fair and quick dispute resolution mechanism…,” he said.

The Minister asked the lawyers community to “strongly endorse the steps the government has taken to provide an environment of stability that will help corporates make their contribution to economic growth”.

“I would most respectfully urge lawyers,judges,academics,we must all work towards clarity in tax laws.

Chidambaram differs with Montek on global standards

Finance Minister P Chidambaram today differed with Planning Commission Deputy Chairman Montek Singh Ahluwalia on aligning Indian laws and practices with the global standards,saying what was needed was “fair and non-discriminatory” norms.

“Montek said that we should align our laws and align our practices to global standards. I am not sure that global standards are necessarily the best standards. Not all global standards are the best,” he said.

Chidambaram,who was speaking at a seminar organised by the Indian Law Institute,said it should be recognised that countries were at different stages of development in this otherwise unequal world.

“I don’t think that we should be tempted by the phrase global standards. What we should aim at is standards which are the best standards which are fair,non-discriminatory,” he said while responding to Ahuluwalia’s suggestions.

According to Chidambaram,the recent global financial crisis had shown that India standards were far better than the US standards.

“For example in terms of banking regulation,we found that the Indian standards were far better than the US standards and we discovered it to our surprise and pleasure and to their dismay in 2008,” he said.