The trust between the government and the industry has gone up following the scrapping of the retrospective taxation regime and the Centre is open to new ideas to further boost the country’s economic growth, Defence Minister Rajnath Singh said on Wednesday.
Speaking at the Indo-US Economic Summit organised by the Indo-American Chamber of Commerce, Singh also said there is huge scope for the American and Indian defence majors to go for co-production and co-development of military equipment and that the cooperation would go a long way in strengthening bilateral economic dynamism.
In his virtual address, the defence minister said India is a strong and reliable investment destination and the American companies should focus on the transfer of technology through joint ventures.
Singh listed a range of measures initiated by the NDA government to boost economic growth and said the global investors are now receiving a “red carpet” welcome in India instead of “red-tapism”.
“We are expecting double-digit growth in the financial year 2022 despite the challenge of COVID-19. But, the challenge will be to maintain a healthy growth rate of 7-8 per cent in the years after 2022,” he said, adding the government is preparing for dynamic growth in this entire decade.
Addressing top executives of various defence firms, the defence minister said, “we are ready to act as a friend, philosopher and guide with whom you can freely discuss the issues and problems pertaining to industry and business.”
He also noted that the coronavirus pandemic has brought newer challenges in terms of disruption to supply chains, the downturn in industrial activities, negative growth in the travel and tourism industry.
“There is no doubt that Indo-US cooperation will go a long way to restore normalcy and further boost economic dynamism,” Singh said.
“We have formulated progressive and investor-friendly tax policies. We have said ‘Good Bye’ to retrospective taxation. The trust between the government and the industry has increased following the scrapping of retrospective taxation. By doing this, we have rectified the mistake of the earlier government (UPA),” the minister said.
The government scrapped the controversial retrospective taxation last month nearly nine years after it was introduced.
Singh called upon the industry leaders to focus on the transfer of technology through joint ventures to realise India’s true potential in the defence sector.
“The foreign OEMs (original equipment makers) can set up manufacturing facilities individually or partner with Indian companies through joint ventures or technology agreement to capitalise on the ‘Make in India’ initiative,” he added.
Expressing confidence that American firms will find India as a major investment destination for defence manufacturing, he assured them that the government is open to new ideas to create a business-friendly environment in India.
“I am sure that the economic and strategic partnership between India and the US will act as a springboard and the forum will act as a bridge to achieve this,” he added.
Singh said the India-US comprehensive global strategic partnership, the 2+2 dialogue, Quad security dialogue and agreements like Logistics Exchange Memorandum of Agreement (LEMOA) and Communications Compatibility and Security Agreement (COMCASA) have taken the bilateral ties to greater heights.
He, however, emphasised that the relations are yet to receive their full potential.
Several progressive policies have been put in place in the last two years that have given the defence sector an unexpected growth trajectory, he added.
The measures cited by Singh included setting up defence industrial corridors in Uttar Pradesh and Tamil Nadu, increasing the FDI limit to 74 per cent through automatic route and 100 per cent through government route under certain circumstances.
The defence minister said despite the COVID-19 situation, India’ economy is back on track due to the steps taken by the government.
“India’s GDP has shown a ‘V’ shaped growth curve in the last two years. Where the growth witnessed a contraction of 24 per cent last year, a jump of 20 per cent has been seen in the first quarter of this year. It is a reflection of the country’s sound economic fundamentals,” he said.