FM Jaitley vows to be more friendly to foreign capital

Blaming high cost of capital for slowdown in manufacturing sector, Finance Minister Arun Jaitley on Monday pitched for removal of entry barriers and a globally competitive taxation regime to attract investments and boost growth.

"We have to put house in order," Jaitley said, to accelerate the growth, as the manufacturing sector was not growing as per its potential and radical steps might be required to revive growth in this key segment, although results will not be visible overnight.

Speaking at a day-long workshop on Make-in-India, he however said Indian economy may improve slightly after two years of slowdown and the next fiscal will be even better.

"The entry point into the manufacturing sector itself has to be eased. Our initial barriers have to be lowered and perhaps even removed. If we keep the doors closed investments won't come in," he said. Jaitley said tax regime should be compatible with rest of the world as when people buy goods "they do not like to purchase taxes along." Stating that manufacturing will remain a challenge unless radical steps are taken, he said cost of capital is the single factor that has in recent times slowed manufacturing. On ease of doing business, the finance minister said, "What is it that has happened in the last few years that added to complication of doing business (in India). Was it the uncertainty over the tax administration (that) has scared investors away? Has it not resulted in close down of plants which were comparable to global competitors?"

Referring to the tough Land Acquisition Act, he said the law itself is going to add to the complications for investors.