There has been widespread concern with regard to implementation of the General Anti-Avoidance Rules (GAAR) among foreign investors. The Shome panel on GAAR suggested deferring the implementation by three years. This was welcomed by the investors.

The Finance Minister’s recent move to meet the FIIs and keep them abreast of the developments was welcome. This keeps the investors involved and shows the Government is working towards creating a healthy investment atmosphere. Investor interest is also sustained, as is evident from the fact that FIIs have been net buyers and invested over $18 billion so far this year.

However, interactions alone will not solve the myriad problems inhibiting foreign investments. The Government has to adopt a holistic approach.

It is in this context that the issue of special economic zones (SEZs) is important. Based on the concessions offered under the SEZ Act 2005, a large number of foreign investors invested in them. The decision to apply Minimum Alternate Tax on SEZs, however, seems short-sighted.

This is because MAT cancelled out all tax concessions that were being offered under the Act. Those who had already invested felt cheated.

Shrut Sharma

Gurgaon

Milking consumers

Prices of milk sachets haven’t fallen despite the recent crash in procurement prices (Business Line, November 15). Adulteration by dairies is another issue consumers have been complaining about. Children avoid dairy milk, as added chemicals gives it a bad odour. My morning coffee prepared with dairy milk has become a distasteful experience. Dairies try to fool us by arguing that preservatives are for hygiene; I have personally seen them mixing old stock of milk powder with milk.

B. Aravinda Prasad

Mysore

(This article was published on November 15, 2012)
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