GST to roll out by 2014: PM to Japanese companies

Says last years 5% growth was temporary,will return to 8% soon

Prime Minister Manmohan Singh today assured the Japanese industry captains that India is not turning back from reforms and that his government will take hard and difficult decisions to restore India on a 8 per cent growth trajectory,starting with,at least,a 6 per cent target in the current financial year.

Our people have tasted the benefits of rapid growth and they will not settle for less. I want to assure you that our government is committed to take hard and difficult decisions in the long term interest of our economy, Singh told a gathering of top Japanese business leaders hosted by the Nippon Keidanren.

STOCK MARKETS LINKS

Further,Singh said,the all-India Good and Services Tax will be in place by next year,even if it might actually be implemented after the 2014 general elections.

I cannot say that we can deliver tomorrow but by 2014,a GST of an appropriate type will be there. We have Lok Sabha elections in 2014 and once that is over,it should be implemented because there is general consensus on it, said Singh while responding to question from the Mitisubishi representative.

Making a strong pitch for Japanese investment,the PM also highlighted the steps his government has taken to make it easier for foreign investors.

We have accelerated the implementation of large infrastructure projects by setting up special mechanisms to ensure that various regulatory clearances do not lead to delays. We have taken tangible steps to enhance incentives for investments. We have liberalised foreign investments in areas like multi-brand retail,power exchanges and civil aviation and further rationalisation and simplification is being planned. We have introduced further reforms in the financial markets.

Singh hoped that these steps will lead to a 6 per cent growth in the current financial year and in due course will help India to a 8 per cent growth path soon,adding that the last years 5 per cent performance was temporary.

Story continues below this ad

The Indian economy grew at an average of 8 per cent per year over the past decade,including the last year of 5 per cent growth. The economic fundamentals which made that possible are still intact. We are confident therefore that we can return to the growth path of 8 per cent.

Singh did acknowledge that there are issues like the priority sector lending conditions on banks,which Japanese financial institutions also find difficult to comply with,but advised that they should try and adjust as the best should not become the enemy of good. His emphasis was on attracting more investment.

India accounts for only 4 per cent of total Japanese outward investment flow into Asia. I am sure you will agree that this percentage should be much higher. We on our part will work hard to turn promise into reality.

He also indicated that India is willing to positively consider the Japanese proposal to build a high speed train corridor between Mumbai and Ahmedabad as well as from Delhi to Chandigarh.

Story continues below this ad

This is an ambitious project and we will need to take a holistic view,based on our infrastructure needs,commercial viability,overall national priorities and the availability of financial resources. We are willing for Japan and India to co-finance a joint feasibility study on this.