The pace at which the NDA government is taking decisions after Bihar assembly election results is commendable and there is no doubt that the situation on the decision-making front is far better today than in the UPA government’s last 2-3 years.
The 10% government stake sale in Coal India cleared by the Cabinet on Wednesday along with a slew of other steps, will fetch about Rs 21,000 crore, if the government successfully crosses the hurdles posed by the unions like it did earlier.
Add this to the Rs 12,700 crore garnered through disinvestment of government equity in the Central Public Sector Enterprises this financial year as of now and the figure would be best ever that any government has succeeded in reaching in a year since the start of the process in 1991.
Obviously, even if it is difficult to meet the Rs 69,500 crore target fixed for the current year that was fixed in the budget, the government appears to be ready to exercise all the options available to reach as close to it as possible.
It will be good if this includes dilution of stakes in ITC, L&T and Axis Bank, held in SUUTI and also the residual stakes in HZL and Balco, even in a staggered manner, as the former alone can give about Rs 60,000 crore and the latter over Rs 15,000 crore.
While there is heightened activity on the policy front and it may be expected that at some point of time the government will touch this option, the real action on the ground seems to be taking place on the tax front.
Resolution of MAT on FIIs issue, the measures to check high-pitched assessments and demands in transfer pricing and other cases, including the inclusion of success rate of assessments and orders made by the income tax officials in appeal as part of their performance appraisal system, appointment of arbitrator in the Cairn tax case, and now opening the possibility of resolving Vodafone retro tax case through conciliation, are all indications that the government is moving in the right direction.
Though the Central Board of Direct Taxes (CBDT) clarified late in the evening yesterday, “There are some unauthenticated stories in media about offer of conciliation of Vodafone case outside arbitration”, it also pointed out that, “Vodafone has in a written communication expressed its desire to go for conciliation for its tax disputes with India”.
The CBDT added further: “In response, the Government has held one preliminary meeting to explore the terms of reference of such a conciliation on 10th November. We have not yet finalised contours of Terms of Reference. There would be more follow up meetings required.”
This, undoubtedly, is a positive sign — with Finance Minister Arun Jaitley already saying that the high-profile legacy tax cases will be resolved soon, the chances of a fruitful conciliation are much higher now than any time before.
Once this is done, the tax terror fear will certainly take a back seat, and along with the policy overdrive, the government will be able to improve the investment and growth scenario, even if the legislative reforms are stuck due to the Parliamentary logjam for the next few sessions.