The government will take moresteps to push reforms, boost investor sentiment and providestable tax laws, Finance Minister P Chidambaram said onSaturday, while expressing satisfaction over the positiveresponse of stock markets to the recent policy initiatives.
"We are committed to undertaking a range of actions,small and large, that ensures that we are able to support oureconomic growth with a stable environment," he said at aconference, 'Economic Growth and Changes of CorporateEnvironment in Asia'.
The assertion came a day after the Finance Ministry cutwithholding tax on overseas borrowings to 5 per cent from 20per cent and approved the Rajiv Gandhi Equity Savings Schemeto attract first time investors to stock markets.
Stock markets cheered the announcement, with the BombayStock Exchange (BSE) benchmark Sensex closing 404 pointshigher at 18,752.83 on Friday.
"I am happy to note that the recent decisions taken bygovernment have been widely welcomed, especially by marketsand by important stake-holders in the market," he said.
Underlining the need for clarity in tax laws, Chidambaramsaid lack of clarity in laws can create a great degree ofinstability in the environment which is not good for economicgrowth.
"And one of the most important contributor to stableenvironment is clarity in law, especially tax laws, fairnessin tax administration, and non-adversarial approach to taxadministration and collection of taxes and above all a fairand quick dispute resolution mechanism...," he said.
The Minister asked the lawyers community to "stronglyendorse the steps the government has taken to provide anenvironment of stability that will help corporates make theircontribution to economic growth".
"I would most respectfully urge lawyers, judges,academics, we must all work towards clarity in tax laws.
Chidambaram said the Companies Bill introduced recently in Parliament seeks to address the issue of good corporategovernance, investor protection and corporate socialresponsibility.
He said good economic and financial practices,transparency and accountability in corporate dealings are apre-requisite for a vibrant corporate culture.
Equally important, Chidambaram said, are the issuesrelated to corporate social responsibility that provideopportunity for the corporate sector to contribute to economicgrowth on a wider scale.
"We as the government in India are committed to providingan environment where corporates among other players are ableto contribute to economic growth," Chidambaram added.