The Hague, November 9
Promising to usher in further tax reforms in the next Budget and to bring down tariffs in India to ASEAN levels, Prime Minister Manmohan Singh has assured multinational corporations that an independent petroleum regulatory authority would be set up to provide a level playing field to them in the oil sector.
At an interaction with Chief Executive Officers of European and Indian corporates last night, Mr Manmohan Singh also made it clear that India would adhere to all commitments already made at the World Trade Organisation, including one on trade related intellectual property rights (TRIPs), on which a legislation would be brought before Parliament soon.
“I recognise that whoever comes to invest in India is
entitled to expect a level-playing field. The government is, in fact, in the process of doing that.
“An independent and credible petroleum regulatory authority will be set up,” he told Mr Jeroen van der Veer, Chairman, Board of Management, Royal Dutch Shell, who is slated to take over as Chairman of the entire Anglo-Dutch Shell Group after the forthcoming merger of the UK and Dutch branches, the first non-British Chairman of the combined firm.
Shell has extensive investments in India and is putting another USD 1.3 billion in port development and gas-based industries in Gujarat, plus an entry into the petroleum retail business.
At the interaction, Mr Van der Veer had specifically suggested creation of a level-playing field for multinational corporations in the oil sector.
Declaring that the economic reforms process initiated in India in 1991 were not reversible, the Prime Minister said
the next Budget would focus on tax reforms. However, he did not elaborate.
Recalling that all Finance Ministers in the past 10-years had reiterated India’s commitment to reducing the tariffs to ASEAN levels, he said the government would adhere to this commitment.
The economist-Prime Minister also utilised the opportunity to raise concerns in India on the non-tariff barriers imposed by European countries and excessive use of anti-dumping measures on Indian exports and the continued restrictions of movement of professionals from India.
He told the Chief Executives that India was not a mercantilist economy. “The more we can export, the more we will import. We do not want to accumulate reserves for the sake of it. The more we earn, the more we will spend,” he said.
The Prime Minister said India was concerned that at a time when it was accepting the logic of globalisation, the argument for protection was re-emerging in the West and expressed the hope that this trend would be reversed.
“We want to take full advantage of the process of globalisation to wipe out poverty at home,” he said.
Recalling that in the past few years India had grown at 6 per cent, Mr Manmohan Singh said to achieve a growth rate of 7 to 8 per cent, India had to accelerate the inflow of foreign investment.
He recognised that investors both at home and those abroad viewed investment, bureaucracy, corruption and tax system as constraints. “I urge you to seize the opportunity,” he told them.
The Prime Minister said India and Europe had cultural familiarity but the country had not taken full advantage of the WTO system and global methods.
Maintaining that on a conservative estimate, India needed USD 150 billion, the Prime Minister said massive investment was required in infrastructure and, therefore, great possibilities were open for European skills and capital.
He promised a stable incrementalist FDI policy which would actively seek investment, particularly in high technology, manufacturing and export sectors. The national common minimum programme of the coalition at the Centre was very investment friendly, he added.
Mr Manmohan Singh said the EU was an important partner for India, particularly in the economic field, and it was the largest economic grouping in the world and by far the largest trading entity.
Listing the advantages of present-day India, the Prime Minister said the country was now an attractive story for the rest of the world with good macro-economic results in the 1990 because of stable and high growth rate and a stable policy environment that lasted four changes of government. — PTI
