GDP growth of 6.5 per cent reflects the country’s economic strength, and not its weakness, the Union Minister for Corporate Affairs, Mr M. Veerappa Moily, asserted today.

He said the Prime Minister, Dr Manmohan Singh, was working to remove the negative sentiments created by the General Anti Avoidance Rules (GAAR) and once the fine-tuning is done, “FII money would start flowing.”

Speaking at an interactive session organised today by the Confederation of Indian Industry (CII), Coimbatore Zone, he said the fundamentals of the economy were strong enough to face the global challenges.

The Prime Minister had already pointed out that the current GDP growth of 6.5 per cent ‘may not be that unreasonable’ given the overall global scene. India would soon revert to a growth rate of 8-9 per cent.

Inclusive growth

Pointing out that countries like the US were facing zero growth, the Minister said 6.5 per cent GDP growth ‘is the strength of India, not the weakness of India’, though the country had been aiming at 9 per cent growth.

What the country wanted was inclusive growth and “GDP alone is not the only agenda for Government of India,” he said.

"The country needed not vertical but horizontal growth wherein every segment benefited.

He said the Government had to act when the black money issue was raised and the GAAR was sought to be amended.

The Government was aware that ‘55 per cent of the FII and FDI (money) comes through ten countries including Mauritius-Singapore-Cyprus route’.

Only 19 per cent of the FII and FDI came through ten other nations including the US and European nations.

Mr Moily said that when the authorities became ‘suspicious of the round tripping’, particularly through the Mauritius route and the Union Government responded with certain amendments (which have been put on hold), ‘certain negative sentiments’ built up.

He said ‘the PM is now seized of the matter’ to remove them. He was confident that once policy fine-tuning happens, FII inflows would start.

Interactive session

Later, during an interactive session, responding to issues raised by Mr M. Kandhaswamy, former President of Coimbatore District Small Industries Association , Mr Moily said, “the city (Coimbatore) richly deserved” an international airport.

The Union Government was also addressing the problem of high interest rates that hampered industrial growth and he was hopeful of some solution in the near future.

Grid connectivity

On the issue of lack of grid connectivity between the North and South, the Minister said it was an issue to be sorted out at the State-level. But he felt that once natural gas connectivity was established, this problem would get addressed.

Others who spoke were Mr Ashok Bakthavathsalam, Chairman, and Dr S.K. Sundararaman, Vice-Chairman, respectively of CII Coimbatore Zone, and Mr G. Ramaswamy, former President of the Institute of Chartered Accountants of India.

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