India is currently the “most attractive” investment destination, the London-based industrialist Lord Swraj Paul said today, underlining that retrospective amendment of laws to bring into the tax net Vodafone-type deals will not have any long-term negative impact.
“India at the moment is perhaps the most attractive country for investment... Whenever anything like this happens, people make a lot of noise,” Lord Paul said when asked whether the controversy over the proposed amendment of the Income-Tax Act from retrospective effect would affect investor confidence.
Lord Paul told PTI the investment decisions are not made only by the taxation issues.
“People see the whole package. Is it a friendly country to invest? ” he said, however, adding that it may have some impact in the short run.
Lord Paul, who is on a visit to India, said Britain had also made similar changes. “The first time the retrospective tax case came up was in Britain...nobody (investor) holds money.
This tax is not the only thing which affects...”
He said more than the taxation issue, corruption and scams are more damaging and slowing down policy reforms as the government “is busy sorting out these scams...”
‘Be more transparent'
Putting the onus on the industry as well for the scams, Lord Paul said: “Let the business also take the responsibility ... This is the responsibility of all people... How can the giver and taker be absolved?”
He reiterated that corruption was not unique to India. In a way, the global financial crisis of 2008-09 was also a result of lack of transparency in the banking sector.
Lord Paul said: “(but) India is having too many at the same time... We have to be more transparent.”
Praise for Budget
Asked about his comments on this year's Budget, he said the Finance Minister has done whatever he could, under the difficult circumstances. “The reason I praised (the Budget) is because Indian economic situation was bad and unless it was a tough Budget, there was no way of solving...,” he said.
“From my point of view, under the circumstances he (Mukherjee) has done a good Budget that will solve problems of the country in the longer term,” Lord Paul said.