India committed to taking 'hard' decisions on economy: PM

India is committed to taking "hard and difficult" decisions in the long-term interest of the economy, Prime Minister Manmohan Singh said today, while assuring Japanese industry that the long-awaited Goods and Services Tax (GST) regime facing hurdles from states will be in place in an "appropriate type" by 2014.

On a mission to woo Japanese investors, Singh told leading business honchos at the Keidanren, the premier chamber of commerce and industry, that the present bilateral trade of USD 18 billion does no justice to the enormous potential that exists between the two countries.

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The Prime Minister faced some searching questions from the Japanese industry which sought improvement in tax regimes, further easing of priority sector lending rules to expand financial services and allowing opening of foreign bank branches in metropolitan cities. "Our people have tasted the benefits of rapid growth and they will not settle for less. I want to assure you that our government is committed to take hard and difficult decisions in the long term interest of our economy," he said.

A top official of Mitsubishi corporation said Japanese investors faced difficulties with different tax regimes in each Indian state leading to complications and wanted to know the timeline by when GST regime will be implemented. "India is a federation and there are difficulties to bring states to agree to surrender tax power but I am confident we will overcome the hurdle.

We will work and we have been working to persuade more and more states to fall in line but it does require amendment of the Constitution and needs much more energetic efforts than an ordinary piece of legislation," Singh said. The GST has been facing opposition from several non- Congress states which have accused the Centre of trying to encroach on powers of the states and that such a move would hit their finances.

"So, I cannot say we can deliver tomorrow but if you ask me by 2014 once elections are out of the way, whichever government is there will be a general agreement of appropriate type in place to help propel India's growth story," he said. The Prime Minister said as a result of a number of steps to revive the Indian economy, Government expects the growth rate in the current fiscal (2013-14) to be much better than in the previous year, hopefully around six per cent or so. "We will do even better in 2014-15.