India grew at 9pc with same policies: Montek

New York: Dismissing concerns about policy paralysis in the Indian government, Planning Commission Deputy Chairman Montek Singh Ahluwalia has said the country has grown in the past at over 9 per cent with the same set of policies.

"…the economy grew by 9 per cent for five years with the existing laws. It is not as if unless we change something that growth rate cannot happen. I am not saying we should not change. We should change", he told PTI when asked whether policy paralysis at home was impacting investment and growth.

Pointing out that reforms are important, Ahluwalia said, "To get a short run improvement in functioning of the economy and to reassure investors you do not necessarily have to focus on change in laws".

He further said that in a coalition government very often the issues get delayed, but there was a lot that the government could do on the issues which did not require legal action. "We should concentrate on that…the government has a very active agenda of trying to get that done" he added.

Ahluwalia said he has also informed investors that their perception that India was not interested in making the country an attractive destination for investment was not "valid."

"…I have explained to them (investors) that their fear that the government of India may not be interested in creating an attractive investment environment is not actually valid," he said.

One of the major positives, Ahluwalia added, "is clearly that India has a growth potential of 8-9 per cent. We are not just whistling in the dark, we did it (achieved high growth rates). If we did it for five years why cannot we do it now."

On the controversial retrospective amendments to the Income Tax Act, which have been approved by Indian Parliament, he said, "I have tried to explain to them that one can have different views on whether retrospective tax is a good idea or not.

"There are obviously exceptional type situation. I have not tried to go into that too much because it relates to a particular company and in some cases the matter is in court."

As regards the General Anti-Avoidance Rules, he said, the government would clarify the position during the course of the year. India has already decided to postpone its implementation by a year.

The Planning Commission Deputy chief, who is in the city on way to Mexico to participate in the G-20 Sherpas meeting, interacted with members of the investor community.

He also met billionaire investor George Soros and American economist Nouriel Roubini, apart from participating in a thematic debate in the UN General Assembly on state of the world economy and finance.