Retrospective Tax Law Damaged India's Reputation Most: EU

Expressing confidence that the new government will spur the growth and investment in the country, European Union today said nothing damaged India's reputation more than the retrospective tax legislation (now deferred for two years).

"Nothing has been damaging India's reputation as much as the retrospective tax law. I believe in the near future a new government will deal with this problem," European Union envoy Joao Cravinho said at an event here.

Stating that while it is not yet clear which political formation will occupy the South Block, the envoy said he is confident that the new government will take measures to revive the economy.

"We don't have the crystal ball, we don't know what the new government will look like, but one thing I can tell you for sure is that whatever the government looks like it will say very early on that it wants to promote growth, employment and foreign direct investments....It wants the country to return to the level of growth it has achieved recently or in the past years," he said.

The measures that the new government can take will change the mood and the atmosphere and signal to Europe and around the world that India is interested in business and attracting the business, he said.

"There are a few other low-hanging fruits that a new government can pluck to change the mood and give a clear signal that it would like to attract investments. And if it does that I believe the investments will be forthcoming quite easily," he said.

He said the EU thinks that there are very good possibilities for the European companies to increase their investments here.

Cravinho also said India will be an important partner for the European Union even as it expects better economic future for the home economies.