2013 High for Market as GAAR Deferred to 2016
A Burst of Applause
Govt pulls out all stops to perk up sentiment.After a string of reforms,it now postpones GAAR.With inflation also cooling,this year has started with positive vibes
The government has deferred the implementation of controversial tax-avoidance rules until 2016,to the relief of markets and industry,which had been crying hoarse about their corrosive effect on investor sentiment towards India at a time business confidence is already low.Announcing the decision to defer the so-called General Anti-Avoidance Rules,or GAAR,by two years a week before he leaves on a tour of Asia and Europe to woo foreign investors,Finance Minister P Chidambaram said the government had accepted the major recommendations with some modifications of a high-level committee headed by noted tax expert Parthasarathi Shome.These rules had become a lightning rod for criticism after being unveiled in last Marchs budget,and the uproar they triggered had forced the government to delay their implementation by a year.Industry cheered Mondays decision to delay GAARs implementation by two more years,and in the stock markets,the benchmark BSE Sensex jumped by 243 points to close at a two-year high.The decision to defer GAAR would stimulate business confidence of investors,which had taken a beating with the introduction of tax proposal.In the next two years,it is hoped that the global and domestic economic conditions would improve and the imposition of GAAR would not have too much of a negative impact on investments,both domestic and foreign, said industrialist Adi Godrej,who is also the president of industry group CII.Planning Commission Deputy Chairman Montek Singh Ahluwalia also called the GAAR deferral a step in the right direction.
Economic Times, New Delhi, 15-01-2013