Sydney: Indian Finance Minister Arun Jaitley on Tuesday said India needs to further ease its business processes to boost foreign and domestic investments, even as he admitted that the country has been impacted by global trade shrinkages.
Terming 'ease of doing business' in India as an "important work which is still in progress", Jaitley also said that the Modi government has been able to straighten several laws and was trying to make taxation systems compatible with the global standards.
Addressing the Sydney campus of the S. P. Jain School of Global Management after arriving on Tuesday morning on a four-day visit to Australia, Jaitley said the National Democratic Alliance government also been able to make headway in terms of eliminating corruption and it was working on removing discretions of all forms.
Jaitley, who was welcomed by Indian high commissioner Navdeep Suri and S. P. Jain School President Nitish Jain at the jam-packed event where he spoke on 'Reimagining the Indian Economy', said the global trade shrinkages has impacted India too in terms of uncertainties in stock and currency markets, which Australia itself has also witnessed.
"Opening of the Indian economy and sectors like insurance, railways, defence and several others which were earlier unavailable for FDI has helped us," Jaitley said.
Listing various measures taken since the NDA government came to power in May 2014, Jaitley said, "We have also removed the unnecessary conditionalities which was slowing down foreign direct investments and this, probably in greenfield projects, has made India the most sought after destination as far as FDI is concerned".
"The second important challenge was not only to improve India's image but.... image gets improved by the fact that in actual operation those who domestically do business and those who intend to invest in India go back with an impression that it is easy to do business in India," he said.
"In term of ease of doing business, you are measured by the stability of policies, by predictability, by cutting short the time between the decision to make investment and actual implementation... you need few approvals and easy approvals," he said.
He said that for India, the system was to get approval from multiple authorities which could frustrate the investors.
"I can 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".
He also said that the government has been able to make a headway in terms of eliminating corruption.
Jaitley further stressed that an area the government was working on was to eliminate discretions of all forms and to eliminate person-to-person contact to ensure a non-discretionary system for all processes. He said that the government has been able to straighten several laws and was now trying to make the taxation systems compatible with the global standards.
"We are now working on direct tax system. we want to put disputes behind us. we want people to clean up their taxation issues and to bring down India's corporate tax gradually to a fair international level which would be at a flat 25 per cent. We are slowly moving in that area," he said.
He also expressed hope that the Goods and Services Tax would be cleared sooner or later.
Jaitley said other areas of focus for the government was agriculture and infrastructure. "As far agri sector is concerned, since it was a stressed sector over the last two years, we have used the opportunity in every possible way to pour investments in this sector," he said and stressed upon measures like higher spending on irrigation, large amount of credit offtake and crop insurance.
"We also utilised the regime created by low oil prices resulting in large amount of savings for the government to start investing in the infrastructure sector," he said.
"We are concentrating on highways, railways, airports, ports and this is the direction in which we are taking the economy," he said.
"Despite global slowdown, we have managed to maintain the growth rate of 7.5 per cent. All our current figures are very acceptable figures and I am reasonably certain that as the global push to the economy slightly improves, hopefully we have better monsoon and these figures will look even better in years to come," Jaitley said.
Welcoming the finance minister, Suri said India saw Australia as a critical partner in Prime Minister Narendra Modi's 'Skill India' programme.
"We are working very closely with number of Australian education institutions. We are looking at different models that are emerging," he said.
Suri said in discussions with Australian skills providers, Indian government was raising the the issue of high cost model offered by the Australian side.
"Education has become an important part of Bilateral agenda and this was taking place at a different level," he said.
"The Indian economy has foreign exchange reserves $356 billion. Foreign investments is pouring into India in a big way and that there was a hope to take the growth to double digit," Nitish Jain of SP Jain School said. Jaitley, who is in Sydney for two days, also met New South Wales Premier Mike Baird. He would address 'Make in India' conference on Wednesday morning along with Australia's Special Envoy for Trade Andrew Robb.