Finance minister P Chidambaram on Saturday promised that the government would not indulge in uncontrolled borrowing that could crowd out private sector investments and also indicated that the government would take further measures to boost growth. We are committed to take a range of actions small and large to promote economic growth, Chidambaram said,adding that recent decisions taken have been widely welcomed by the market. The BSE Sensex closed at a one year high on Friday after a slew of economic reform measures,including notification of foreign direct investment in multi-brand retail,lowering the cost of overseas borrowings for domestic firms and launching the Rajiv Gandhi Equity Savings Scheme. The minister promised that the government would try to remove uncertainties from the economic climate,especially uncertainties on tax policies in order to create a stable environment for companies so that they can contribute to economic growth. The animal spirit of the corporate sector determines the spirit of risk taking and to that extent growth and investments, Chidambaram said while addressing the International Academic Conference 2012. Clarity in laws,especially tax laws,fairness in tax administration,a fair and quick dispute resolution system,involving courts of law in any country governed by the rule of all laws,all these will be the trigger for growth, he said. Following controversial tax proposals in the Budget 2012-13 that posed a threat to the countrys investment climate,the government has set up an expert committee chaired by Parthasarathi Shome to review issues relating to retrospective taxation of non-resident transfer of assets,taxation of foreign institutional investors as well as the general anti avoidance rules (GAAR). Chidambaram stressed on the need for higher growth and said that economic growth is not a choice but an imperative. We must focus on factors that contribute to better growth and those that retard it, he said. Addressing the conference,Planning Commission deputy chairman Montek Singh Ahluwalia also stressed on the need to provide a stable tax and policy regime to companies,as they contribute nearly half of the countrys fixed investment. Companies dont want to be surprised in the morning. There must be laws that bring stability for corporate,be it in corporate laws,securities laws,tax laws or those relating to dispute resolution and arbitration, he said. Ahluwalia also added that though the economy is likely to register a growth of around 6.5 per cent this fiscal,it would still be better than that in many other countries.
