World Bank chief bats for Pranab on changes in tax laws

New Delhi, Mar 31 (PTI) Batting for Finance Minister Pranab Mukherjee's proposal to tax Vodafone type deals, the World Bank President Robert Zoellick has said that India wants that the company should pay tax at some place and investors must give some time to the government to explain the details. "Indian government is sensitive that they want to have an environment that draw both domestic and foreign investment and so I hope investors give the Indian government time...," Zoellick, in India on a visit, told reporters here Friday when asked about the Indian government's intention to introduce proposals to tax overseas investments. Referring to his discussions with Mukherjee and senior government officials, he said, "The heart of the policy is that they believe people should pay tax somewhere." In order to tax Vodafone-type deals, Mukherjee in his India Budget for the country's next fiscal beginning April 1has proposed to amend the Income Tax Act with retrospective effect, a move which evoked sharp reaction from industry. He further said that the intention of the Indian government is to bring into the net those companies that take advantage of treaties and tax havens to avoid payment of taxes. In order to strengthen the provision to tax overseas companies, the government has also introduced General Anti-Avoidance Rules (GAAR) in the Finance Bill 2012, which has created concerns among the foreign investors leading to uncertainty in the stock markets. Zoellick also said the World Bank group has extended a total credit of USD 42 billion to India. "We are also looking at leveraging additional funding through the private sector to help India meet its development needs, especially in the area of infrastructure. And public private partnerships can help India meet some of its huge needs," he said. Commenting on India's growth prospects, Zoellick said India will clock a 7 per cent growth and the World Bank's estimate is same as that of the government projections. As per Indian government projection, the Indian economy is estimated to grow at 6.9 per cent in the current fiscal and 7.6 per cent (plus/minus 0.25 per cent in 2012-13). "India will continue to be a fast growing economy," he added. PTI