The Telegraph
Monday , January 9 , 2012
Since 1st March, 1999
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PM upbeat on growth rebound

Jaipur, Jan. 8: Prime Minister Manmohan Singh today said the country was passing through difficult times, and the economic growth in this fiscal would be 7 per cent against 8.5 per cent a year ago.

“Our country is going through difficult times... We are up to the task of meeting these challenges we face as a nation,” he said, while addressing the 10th Pravasi Bharatiya Divas here today.        

He, however, was confident of growth going up to 9-10 per cent in the coming years as the “economic fundamentals are strong and... the constitutional processes are robust”.

“We hope to bring back the rhythm of our growth process to sustain an annual growth rate of 9-10 per cent in the medium-term. Our domestic savings rate, which stands at 33-35 per cent of our GDP (gross domestic product), will facilitate the realisation of our objectives,” he said.

However, the mood at the meet was sombre, with some NRIs sceptical about good governance and many displeased with the tax to be levied from April if they stayed beyond 60 days in India.

The Prime Minister said the proposed pension and life insurance fund for overseas workers would meet a long-pending demand.

“It will encourage, enable and assist overseas workers to voluntarily save for their return, resettlement and old age. It will also provide a low-cost life insurance cover against natural death.”

Singh said the fight against inflation was yielding results. Food prices, in fact, fell for the first time in six years for the week ended December 24.

The Prime Minister also convened a meeting of The Global Advisory Council of Overseas Indians. The members discussed matters concerning higher education, FDI in retail and other governance issues.

In a separate session, which was addressed by finance minister Pranab Mukherjee, NRIs rued the new residency tax to be effective from April.

A delegate said the move would hinder ties with the motherland and affect investments made in India in the form of bank deposits. At present, NRIs can spend up to 182 days in a year without being taxed.

The government in principle wants to clamp down on rich NRIs who spend months in India doing business and then evade taxes.

Many NRI associations, especially in the US and Canada, are lobbying against the move.

Replying to a US resident, who has been facing difficulties in getting back the money deposited in the foreign currency non-resident (FCNR) account, Mukherjee said, “We have simplified the deposit and remittance scheme for the FCNR accounts and will have to look into individual cases.”