Prez refuses to join debate on proposed changes in tax policy

Tirumala (AP): President Pranab Mukherjee today refused to join the debate over changes sought to be made by the government in retrospective taxation policies and disapproved sentiments that indicate lack of confidence.

“Here policies have to be formulated by government, whatever they’ll consider, they’ll do so,” he told reporters here.

Mukherjee’s remarks came against the backdrop of the controversial measures he had introduced in this year’s budget that had come under attack from domestic and foreign investors.

He was asked about some changes in the retrospective tax provisions and General Anti-Avoidance Rules (GAAR) being considered by new Finance Minister P Chidambaram.

Mukherjee as Finance Minister had got the income tax provisions amended to enable tax authorities to issue notice to Vodafone for realisation of tax arrears.

Asked about his speech at the Madras Chamber of Commerce yesterday against spreading prophecies of doom, the President said there were difficulties in certain areas and the country was facing problem from fall from high growth rate to low growth rate, current account deficit and lack of improvement in investment climate. Domestic savings have also gone down slightly and there was need to induct positivities.

“We have to encourage positivity and from there we have to improve our positions. Difficulties will be there.

Difficult external factors like international commodity prices like crude and petroleum prices will be there.”

“On the main theme, so I told them please instill confidence in yourself and your industry. When we are in difficulties, confidence will help us, and not lack of confidence or negative sentiments,” Mukherjee said.

In his first major speech on economy after assuming the office of President, Mukherjee yesterday hit out at self-styled Cassandras for their prophecies of doom for the Indian economy and asserted nothing can be more dangerous to it than “negative” sentiments in the industry.

The President had said India has a huge domestic market and therefore domestic growth-driven economy may be appropriate for the country.

“In the past, we have had problems. We have overcome them through collective efforts. I am confident we will be able to overcome them. Don’t listen to self-styled Cassandras and forecasters of doom,” he had said.