The Prime Minister has set up a new panel for creating guidelines or the controversial general anti avoidance rules (GAAR), which has been criticized by the industry members as well as foreign investors as counterproductive for business sentiment.

There are renewed hopes that the new panel will change some of the rules that have attracted criticism from the investors. Foreign investors have expressed serious concerns over the worsening investment climate in the country due to the plans to implement the GAAR.

The finance ministry said in its draft guidelines that General Anti Avoidance Rules will come into effect from April 1, 2013. The draft guidelines have also said that only those that foreign institutional investors will come under GAAR, who have opted for dual taxation avoidance agreements.

Prime Minister Manmohan Singh has taken charge of the finance ministry until a new finance minister is appointed. The Prime minister might hold the portfolio until the next Parliament session and will take steps to boost the slowing economic growth in the country and boost investor confidence.

PM's Chief Advisor C Rangarajan as assured that the GAAR will be modified to address the concerns expressed by the foreign investors.