“We have been told do not worry.” Those were the words of Vodafone India non Executive Chairman, Mr Analjit Singh, after his meeting with the Deputy Chairman of the Planning Commission, Mr Montek Singh Ahluwalia, on Thursday.

This sums up the mood in the Government. The new man in charge, the Prime Minister, Dr Manmohan Singh, is clearly prepared to relook at some of his predecessor’s unpopular moves, especially the highly debated and controversial retrospective amendment to the Income-Tax Act.

The meeting with the man widely seen as the Prime Minister’s de facto deputy in matters financial was one of the key developments on day two of the Manmohan Singh dispensation.

After his meeting with Mr Analjit Singh, Mr Ahluwalia said, “Government must clarify if investors are confused with tax guidelines.”

However, he said that tax issues related with a particular company were not discussed in the meeting. He also said that the Finance Ministry was working on addressing most tax issues and genuine FIIs “need not worry” with regard to General Anti Avoidance Rule (GAAR).

Clarification sought

Earlier, the Finance Secretary, Mr R.S. Gujral said, “The Prime Minister’s Office (PMO) sought clarifications on taxation issues and Section 9 of Income-Tax Act (related to tax on indirect transfer of assets). We asked them to give us two to three weeks time.”

Mr Gujral added that the Finance Ministry will bring out draft regulations for GAAR any time now for public consultation. This will be open for public comment and then a final shape will be given.

He ruled out any plans to defer implementation of GAAR, which had evoked sharp reactions from both domestic and foreign investors.

The Government had already postponed the Budget proposal of implementing GAAR by one year to April 2013.

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