Prime Minister Narendra Modi (centre) cuts a ribbon as Finnish Prime Minister Juha Sipila (right) and Maharashtra chief minister Devendra Fadanvis look on during the opening of the ‘Make in India Week’ in Mumbai. Photo: AFP
Prime Minister Narendra Modi (centre) cuts a ribbon as Finnish Prime Minister Juha Sipila (right) and Maharashtra chief minister Devendra Fadanvis look on during the opening of the ‘Make in India Week’ in Mumbai. Photo: AFP

Mumbai: Launching the largest-ever manufacturing summit Make In India Week in Mumbai, Prime Minister Narendra Modi on Saturday said the government is swiftly working towards a transparent and predictable tax regime to make the country a global manufacturing hub.

Addressing the largest business exhibition attended by heads of state, foreign delegates and industrial captains, Modi said the country will not resort to retrospective taxation.

“I have been saying that this century is Asia’s century. My advice to you is to Make India your center; if you want this century to be your century,” Modi said citing openness of the economy and willing of the government to make necessary course corrections in the policy.

“This is the best time ever to be in India; And it is even better to Make in India,” Modi said.

The prime minister emphasized that it is not the time for incremental changes but the country needs quantum jump.

Modi said the government is trying to remove the bottlenecks that were affecting investments and growth.

“We have carried out a number of corrections on the taxation front. We have said that we will not resort to retrospective taxation. And I repeat this commitment once again. We are also swiftly working towards making our tax regime transparent, stable and predictable,” Modi said.

The Make In India week will conclude on 18 February.

Make in India is the current government’s flagship initiative, launched by the prime minister in September 2014, to encourage international companies to manufacture their goods in India. Make in India Week will be the flagship event to provide greater momentum to the Make in India initiative, and to showcase to the world the achievements of the nation in the manufacturing sector.

Make In India week is being celebrated at a time when India’s factory output contracted for the second month in a row in December. The Index of Industrial Production (IIP) shrank 1.3% in December led by manufacturing after a 3.4% contraction in November.

The Reserve Bank of India (RBI), in its monetary policy review on 2 February, said the near-term outlook for industrial activity may be constrained by adverse base effects in the fourth quarter and still weak exports, although a pick-up in corporate profitability on the back of declining input costs may provide an offset.

However, Modi was convinced about the prospects of the economic growth.

The prime minister pointed out that the current government believes in minimum government and maximum governance and the states have also started making policy corrections for Make In India.

Modi expected that India will end the current financial year with well over 7% gross domestic product (GDP) growth. He also cited foreign direct investment (FDI) inflows to have risen by 40% under his government.

“India is blessed with three Ds. These are: Democracy, Demography and Demand. To this, we have added the fourth D that is Deregulation. Today’s India is this four dimensional India. Our judicial systems are independent and time tested.

You will not find all these elements in any other country,” Modi said.

In 2014-15, India contributed 12.5% of global growth and its contribution to global growth is 68% higher than its share of the world economy, Modi said while pitching the case for India.

Inviting industrial captains to invest in India, Modi said: “These are very good signs. I would like to give our industry some friendly advice. Don’t wait. Don’t Relax.”

Maharashtra chief minister Devendra Fadnavis said the Make in India initiative has set off competitive federalism. “But this is a healthy and fair competition and it will further lead to complimentary federalism,” Fadnavis said.

Noted economist and former member of the planning commission Narendra Jadhav said the prime minister made a spirited pitch for India. “He was expected to make a spirited salesmanship for India and that is what he did. Though you could find fault with the numbers he gave—indeed some of the numbers he quoted are actually incorrect—the spirit of optimism was there and that is good for India,” Jadhav said.