Thaindian News

Washington, April 22 (IANS) Asserting that India has a “very powerful, strong and acceptable prime minister,” Finance Minister Pranab Mukherjee Sunday rejected a suggestion from corporate America that a leadership “vacuum” was chipping away at India’s investment climate.

“How can I comment on the perception of some organisation or institution,” he asked when speking to reporters here when asked about a letter from the US-India Business Council (USIBC) to the White House. “I can only state the fact that there is no vacuum in the leadership of the union government.”

“And there is a very powerful, strong, acceptable prime minister,” said Mukherjee, who was here to attend the spring meetings of International Monetary Fund (IMF) and the World Bank.

Harold ‘Terry’ McGraw III, USIBC chairman and CEO of McGraw-Hill companies, is reported to have suggested in a recent letter to President Barack Obama’s deputy national security adviser Mike Froman that with Indian cabinet ministers busy dousing political fires, powerful bureaucrats were running the show in Delhi.

“What is apparent is that political power is devolving to strong state leaders, and the vacuum at the centre is allowing forces in government to move on issues that are harmful to India’s investment climate,” McGraw said in the letter.

Referring to his meeting with the US treasury secretary, who had raised the US business community’s concern about certain retroactive changes in the Indian tax laws, Mukherjee said he had explained that the proposed changes were “not substantive, but only clarificatory in nature.”

The proposed changes to impose retroactive tax on some international mergers that exchange Indian assets announced in the budget couldn’t be used to reopen tax cases more than six years old as other legislation existed to prevent this, he repeated to allay the fears of the US business.

(Arun Kumar can be contacted at arun.kumar@ians.in)