Montek advised against Vodafone tax

Montek advised against Vodafone tax


Dr. Montek Singh Ahluwalia, who was deputy chairman of the Planning Commission during the United Progressive Alliance’s (UPA’s) decade in office (2004-14), has said he had in 2012 advised then prime ministerDr. Manmohan Singh and then finance minister,Mr. Pranab Mukherjee, not to implement one of the most controversial decisions taken by the government of the day — to retrospectively amend the Income Tax Act, 50 years after it was passed, to overturn the Supreme Court’s Vodafone judgment. However, they did not heed his advice.

Asked whether this meant that DR. Singh agreed with the proposal and didn’t think it would send out a damaging message about India’s attitude to investment and the rule of law, or that he was weak and unable to overrule the finance minister, Dr. Ahluwalia said he couldn’t answer that because he was not privy to any discussions between the two.

However, he did say that at no point thereafter (during the past eight years) had Dr. Singh told him that the decision to retrospectively amend the Act was a mistake. He said this had not been discussed between them.

In a 60-minute interview, to cover the launch of his forthcoming book Backstage: The Story Behind India’s High Growth Years, Dr. Ahluwalia said that the land acquisition law in 2013 'went too far'. He admitted the government had received petitions from industrialists pointing this out but since they were 'stakeholders' their advice was not taken.