Wooing investors with promise of an easier business environment and stable tax regime, Prime Minister Narendra Modi today said retrospective taxation has been made a thing of the past but he is "not able to do anything" on two cases inherited from the previous government as they are "sub-judice".
Inviting Saudi businesses to come and invest in India's defence, energy, railway, health and agriculture sectors, Modi also said that a common indirect taxation regime in form of GST (Goods and Services Tax) was "about to happen". He, however, refrained from giving any specific timeframe.
Addressing a select group of Saudi and Indian business leaders on the last day of his two-day visit to Saudi Arabia, Modi said his government has opened up many sectors to foreign investment and India stands out as a "beacon of hope" amidst global economic slowdown.
Prime Minister further said his government was trying to strengthen the banking network in India by freeing them from non-performing assets (NPAs) of state-run electricity companies whose liabilities had gone up significantly.
Modi said India has taken major policy initiatives to create favourable environment for investors besides removing administrative bottlenecks. In this regard he said the World Bank has placed India on 12th position in the list of countries that had ensured ease of doing business.
"Today, the world is facing a very deep economic crisis and in this situation, India is a beacon of hope. Whether it is World Bank, IMF or credit rating agencies, all of them consider India one of the fastest growing economies," he said.
On roll out of the much-delayed GST, Prime Minister said, "GST will happen. I cannot give a timeframe, but it will happen. It was our commitment, and it is about to happen."
To a question on retrospective tax, Modi said it will never be brought back again. He said two cases were 'sub- judice' and it would not be proper for him to comment further.
"As far as retrospective tax is concerned, it is a thing of the past. We have repeatedly said this in Parliament and I am repeating here again today.
"There were two incidents that took place under the last government. These are sub-judice. So, I am not being able to do anything on them. In one of the cases, positive outcome has come. Retrospective tax does not exist in India anymore. It has become a thing of the past. It won't come," he said.
Although Prime Minister did not specifically name the pending cases, the major retrospective tax disputes include those involving Vodafone and Cairn.
"I think in international relations, the taxation system should be predictable. If somebody wants to come (to India) after 10 years, he should know India's tax structure is like this. That's why we are working on a long-term tax system and we are implementing and I do not think there will be any problem in that," Modi said.
A Saudi businessman had asked Modi about retrospective tax regime, GST, banking system and some other issues and wondered whether Modi will be able to address their concerns.
Incidentally, Cairn Energy CEO Simon Thomson told PTI in an interview in London today that international investors want the Modi government to walk the talk on resolving retrospective tax issues and send a clear signal that things are changing under the new dispensation.
Cairn, which gave India its biggest onland oil discovery that now accounts for a fifth of the country's oil production, will press ahead with the arbitration challenging use of a legislation to tax internal business reorganisation with retrospective effect and will seek USD 1 billion in damages, he further said.
Eyeing billions of dollars of investment from Saudi Arabia, which is setting up a USD 2 trillion public investment fund, Modi invited top CEOs to invest in defence, energy, railway, health and agriculture sectors in India.
Holding that there was huge opportunity to ramp up trade ties, he said time has come to move from 'buyer-seller relationship' to chart a new path of growth and development which will benefit people of both the countries.
"We have to look beyond the buyer-seller relationship, because that will be an obstacle in the path of progress," he said at the interaction organised by the Council of Saudi Chambers.
Saudi Arabia's Minister for Commerce and Industry Tawfig Fawzan Al Rabiah and Minister of Economic and Planning Adel Faqih were also present on the occasion.
Prime Minister also sought joint ventures and transfer of technology in the fields of defence, deep sea oil exploration and railway.
He said Saudi investors can invest in building cold storage network in India as well as in manufacturing of equipment for generation of solar energy.
He said Saudi investment in fertilizers, warehousing, cold chain facilities and agriculture, would be a win-win partnership, as it would ensure good quality food products for Saudi Arabia.
He also said India and Saudi Arabia should look at working together in the field of cyber-security as it has emerged as a major area of concern.
Saudi Arabia is India's fourth largest partner with bilateral trade exceeding USD 39 billion in 2014-15. It is also India's largest crude oil supplier and accounts forabout one-fifth of total imports.
Describing India and Saudi Arabia as "old friends", Prime Minister said both the countries should take bold new steps to a "golden future".
Emphasizing the strength of ties between the two countries, he recalled King Salman bin Abdulaziz Al Saud mentioning that he was taught by an Indian teacher.
Modi said India had a unique combination of democracy, demography and demand, and several policy initiatives had been taken over the last two years to spur growth and progress.
Speaking about health sector, he said there was tremendous scope for investment in the manufacturing of medical devices.
He said India's health sector which is globally extremely cost competitive, offers immense scope for health tourism. He added that Indian nurses, present in large numbers in the Gulf, are a testament to India's well-trained manpower.
"We import everything for defence sector. Why can we not manufacture defence equipment in India? You investors can play a big role in that. Whatever will be manufactured, India is a very big buyer," Modi said.
Inviting investments in petroleum sector, Modi said investors can partner India in energy sector as the country offers "transparent" policies.
He said in one year, India has already achieved 5,500 MW of renewable energy production.
"When I first time said 175 GW renewable energy people were surprised.... And I am confident that we will do it within the time period. I want investment in solar equipment manufacturing and we are ready to produce 175 GW renewable energy, which will be a strange thing for the world," Modi said.
Later, Ministry of External Affairs spokesperson Vikas Swarup tweeted that Prime Minister met Chairman of Saudi Aramco, Khalid A al-Falih and discussed issues related to energy and healthcare sectors.
Al-Falih, who is also the Minister of Health said Aramco looks at India as its number one target for investment, read Swarup's tweet.
Saudi Minister of Foreign Affairs Adel al-Jubeir also met Narendra Modi before the ceremonial welcome.
While interacting with 30 Saudi CEOs and Indian business leaders here, Prime Minister said the Centre along with state governments have worked to take over the distressed power sector loans from banks. "Now we are working with private companies. On that also we have progressed fast. So NPAs will not be an issue in the near future."
Modi said a lot of foreign banks are functioning in India and going forward, whatever is needed, the government will do.
Modi said India had a unique combination of democracy, demography and demand, and several policy initiatives have been taken over the last two years to spur growth.
He said there was tremendous scope for investment in the manufacturing of medical devices.