Finance minister Pranab Mukherjee told HT just after the sharply lower GDP figures for the latest quarter were announced on Thursday that two important measures had been taken during the last two days to help bring the momentum back.
"There would be no multi-level tax deduction at source for software exports and no tax cases would be reopened where assessment proceedings have been done before April 2012," Mukherjee said, explaining the measures.
Sources in the finance ministry said the GDP figure of 5.3% for January-March 2011-12 — the lowest in the last nine years — had come as a bit of a surprise as they had estimated it to be around 6%.
The finance minister also pointed to "some good signs" amid the "disappointing" growth figures.
"Net inflow of FIIs — debts as well equity — from January to May 28 has reached $11.89 billion. This is the highest inflow of the corresponding periods of each calendar in the last decade," he said.
"These GDP figures reflect the performance during January-March 2011-12. We have already taken a few measures in the general budget. The manufacturing policy is in place and interest rates have been reduced by 50 basis points. We hope these measures will allay the investors’ apprehensions," the minister said.
Finance ministry officials also pointed out that during 2011-12, foreign direct investment (FDI) flow touched $46.84 billion and external commercial borrowing increased by 54% over past six months.