Sydney: India needs to further ease its business processes to boost investments, Finance Minister Arun Jaitley said Tuesday while inviting foreign sovereign wealth funds to be part of the country's infrastructure, pension and insurance funds.
He also assured investors here that the government has resolved various legacy issues with regard to taxation and is gradually working to bring down the corporate tax rates to the global level of 25 percent from 30 percent currently.
Jaitley admitted that the country has been impacted by global trade shrinkages, but said that various reform measures including opening up of sectors to greater FDI have ensured a high GDP growth of over 7.5 percent.
Terming 'ease of doing business' in India as an "important work which is still in progress", Jaitley said the Modi government has been able to straighten several laws and is trying to make taxation systems compatible with the global standards.
Addressing the Sydney campus of S P Jain School of Global Management after arriving here this morning on a four-day visit to Australia, Jaitley said the NDA government has been able to make headway in eliminating corruption and is working on removing discretions of all forms.
Speaking on 'Reimagining the Indian Economy', Jaitley said the global trade shrinkages has impacted India too in terms of uncertainties in stock and currency markets.
"Opening of the Indian economy and sectors like insurance, railways, defence and several others which were earlier unavailable for FDI has helped us," he said.
He said that for India, the system was to get approval from multiple authorities which could frustrate the investors.
"I can't claim that we have achieved everything but I think there is a greater realisation in India that in the competitive world today not only to attract foreign investors but also persuading domestic investors, we will?have to ease our business processes," he said adding, "that's an important work which is still in progress as far as India is concerned".
Jaitley also said the government is now working on direct tax systems where "we want to put the disputes behind us", a reference to cases involving the likes of Vodafone and Cairn.
"We want people to clean up their tax issues. And therefore, in this Budget I have also suggested various windows of clearing up pending disputes," Jaitley said.
He said the government is working to bring down India's corporate tax rates gradually to a fair international level which will involve "no discretion, no rent-seeking exemption, phasing all of them out gradually and then bringing taxation rate to a flat 25 percent".
Later, at another event, Jaitley invited businesses in New South Wales to invest in India, saying the country wants foreign sovereign wealth funds to be part of NIIF, pension and insurance funds in India.
Making opening remarks during his meeting with the New South Wales Premier Mike Baird, he highlighted various initiatives and reforms measures undertaken by the government.
Stating that India needs a lot of Foreign Direct Investment, especially in manufacturing and infrastructure sectors, he said state governments are taking keen interest and competing among themselves to attract foreign investments.
Baird expressed keen interest in investment opportunities in India particularly in the infrastructure sector.
Jaitley also invited global funds to invest in various areas, including NIIF.
The Rs 40,000-crore National Investment and Infrastructure Fund (NIIF) will have government holding of 49 per cent and the rest will be of private investors. The government is in the process of shortlisting CEO to head the NIIF.
Sovereign wealth funds (SWFs) from countries like Singapore and UAE as well as private equity funds are exploring investment avenues in India's maiden SWF NIIF.
On Goods and Services Tax (GST), Jaitley said one uniform common tax for whole of India, which converts the country into one big market and allows transfer of goods and services to take place across this large market, is pending before Parliament.
"I am quite certain and we are reasonably moving towards a situation where we should be sooner than later be able to clear this...In Parliament," he said.
The indirect tax reform, GST is stuck in the Rajya Sabha where the ruling NDA does not have a majority. Congress has been seeking three changes in the bill, including a constitutional cap on GST rate.
The GST bill is likely to come up for discussion in the second leg of Budget session beginning April 25.