India’s Finance Minister Arun Jaitley (left) speaks to Timothy Geithner, former US Secretary of the Treasury, at the Council on Foreign Relations in New York on Thursday.

IANS/New York

Wooing investors in the US, India’s Finance Minister Arun Jaitley on Thursday said economic reforms being currently shaped through the legislative process can push India’s growth rate above 7 to 7.5% range.
“Neither the government, nor the people, nor the industry whose representatives, some of whom are here, nobody is very excited about a 7-7.5% growth rate in India,” Jaitley said here at the Council on Foreign Relations (CFR), a leading think tank.
“Because a series of reform fixes which are in the pipeline and are to be implemented, we have now identified all the problem areas,” he said in a conversation with Timothy Geithner, president of investment firm Warburg Pincus.
“I think one by one as we go resolving most of them, hopefully we should reach what our destination targets are,” Jaitley added.
Earlier on Thursday, he told the Wall Street Journal: “The India story can now be brought back to centre stage. We were falling off the radar.”
“Important changes” are being made in government policies every week, said Jaitley, who is on a nine-day visit to New York, Washington and San Francisco where he will meet investors and chief executives.
Overhauls are moving ahead at “a rapid pace” and “there’s a lot of agenda still to cover,” Jaitley said.
He also expected Parliament to take action on measures to simplify the country’s tax regime.
The government, he said, is looking for compromises that would speed up passage of a new law aimed at easing the acquisition of land for development projects.
Referring to tax notices issued to foreign investors to retroactively pay a tax, known as the Minimum Alternate Tax (MAT), Jaitley said the tax notices were a legacy of a 2012 litigation and would be reviewed by the Indian Supreme Court.
“Once that judgment comes, MAT will get sorted out,” he said.
Jaitley noted that the government has enacted a law saying MAT won’t apply to foreign institutional investors from April 1, 2015.
With Jaitley allaying concerns of American investors that India will not make retrospective tax demands, the US-India Business Council (USIBC) yesterday said the first year of the Narendra Modi-led government has seen a positive response “from investors across the board”.
“The past year has seen a positive affirmation for Prime Minister Modi’s ‘minimum government, maximum governance’ agenda from investors across the board,” Mukesh Aghi, president of USIBC, said at a reception here in honour of the finance minister organised by the business chamber.
“The council and its membership eagerly await the passage of critical legislations in the areas of taxation and the Land Acquisition Bill,” he added.
Jaitley had earlier said in an interaction at the Council on Foreign Relations here: “I have no difficulty in saying that any decision which is retrospective, except in some very unusual circumstances, which creates fresh liabilities is certainly not acceptable.
“Therefore, ever since the present government has been formed, we said it when we were not in government and therefore we’ve lived up to our word, this government will not legislate anything that is retrospective.”
USIBC chairman and MasterCard chief executive Ajay Banga said: “What investors need in return is continued clarity of the rules of the road – especially in areas like taxation, intellectual property, and improved ease of doing business.”
“The recent commissioning of Azure Power’s 100 MW solar projects, the largest under the National Solar Mission, in record time is an excellent testament to improvements in the regulatory environment and ease of doing business in India,” said Azure Power chief executive Inderpreet Wadhwa.
“Amway is proud of its Rs5,500mn investment in manufacturing in support of the Make in India campaign,” said Amway chairman Steve Van Andel.
The finance minister, accompanied by a high-power business delegation, is on a 10-day visit to the US during which he will meet US Treasury Secretary Jacob Lew, foreign institutional investors (FIIs) and US industry leaders.
“Excessive interference” by the judiciary in commercial arbitration is not good for the investor because it adds costs to Indian companies and the cabinet is considering changes in law to deal with that, Finance Minister Arun Jaitley said.
“When India did legislate in terms of global compatibility, dispute redressal laws for international commercial arbitration, etc., the courts interpreted it to mean that ‘our jurisdictions are not ousted; we can interfere’,” Jaitley said. “Indian parties (to contracts) have suffered on account of this approach because then an essential ingredient of all contracts is that the venue of dispute redressal will be outside India (and) the substantive and procedural laws will also be outside India.”
“This has become very costly for Indian parties,” he added. “So an excessive interference or a tendency to have excessive judicial interference is not necessarily a move which is friendly to the interest of the investor itself.”
Participating in a discussion presided over by former US Treasury Secretary Timothy Geithner at the prestigious Council on Foreign Relations, Jaitley was answering a question from the audience about the effect of the judiciary on the economic and infrastructure development agenda.
“Some of the interventionist judgments of the courts have been examined by the government and by the Law Commission in India and, therefore, changes in our own dispute redressal law have been suggested,” he said. “Those changes are now before the cabinet and (will) hopefully nullify the impact of those judgments so that domestic tribunals or agreed tribunals can work on their own terms.”