Growth needs to rebound from 5% level: Immelt

Jeffrey Immelt, chairman and CEO of General Electric has described the current 5 per cent annual growth rate of the Indian economy as unsustainable given the requirements of the economy. He has also said the labour advantage of India has become less important for manufacturers, like his company.

Speaking at a press conference in New Delhi, Immelt said the slowdown India was facing could be cured if the government provided certainty in tax laws and made the country "a good place" to invest in. Immelt was referring to the controversy kicked up by the government last year when it introduced a retrospective taxation provision and also allowed for taxation of overseas mergers and amalgamations of companies, if the assets were based in India.

Coming just days before finance minister P Chidambaram presents the union budget on February 28, the GE chief said the policy uncertainties have to be sorted out for the economy to bounce back on to a faster growth rate. He said the GE wish list was for clarity in the investment laws. According to him GE was a believer in tax reforms adding that tax advantage cannot be the over riding reason to make an investment decision for companies like GE. "We take the longer view here" so costs of materials and availability of markets were more important for expanding operations in India.

He, however, complimented Chidambaram for having begun the right moves to correct "the steady drumbeat of what I would say was some fairly negative news". He mentioned the setting up of the Cabinet Committee on Investment as one of the very positive measures in this context. "I already see signs of correction" and said the finance minister is "well respected and known to all of us around the globe".

But the chief of one of the top global companies did not see too much scope for the exports of manufacturing from his India operations to countries like the USA.

... contd.

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