Washington/New Delhi, Feb 1 (FN Agency) The US-India Business Council (USIBC) on Tuesday said overall, the initiatives in the Union Budget show India’s continued commitment to enhancing productivity, creating jobs, and capitalising on nine per cent projected growth to integrate into global value chains. Congratulating Finance Minister Nirmala Sitharaman and the Government of India on the Union Budget 2022-23, USIBC President Atul Keshap said to achieve the goals, the Budget embraces efficient tools and vital outcomes like increasing the use of digital technology, mobilising private capital and climate-sensitive development. “As always, the details are important.
The announcement of a 35 per cent increase in capital expenditure is a significant step forward, especially after the substantial increase in the prior budget. “The commitment to a rapid rollout and supportive ecosystem for 5G technology is also notable. The key will be to translate these initiatives into accelerated infrastructure development on the ground that speeds up travel, lowers logistics costs and broadens digital access by attracting private investment.” The budget embraces digital technologies to advance key goals like financial access, quality healthcare, enhanced educational and skilling opportunities, and higher agricultural output. The Government can only maximize returns from these initiatives if it creates a level playing field for competition among firms who supply key inputs, be they digital payment providers or life sciences companies, a statement said.
Under this budget, private investment will continue to be a key driver of growth. Efforts to ease doing business like reducing the time to set up a business, eliminating thousands of compliance requirements, and making land management more efficient will help achieve this objective. The acknowledgment of the role that venture capital and private equity play in flowing quality investment into new enterprises and job growth is critical, as is the commitment to enhance the ecosystem for these firms’ operations. The Government can make prompt progress in this area by finalizing the framework for the direct overseas listing of Indian companies and making the scope of investments subject to Press Note 3 more clear and assessments time-bound, Keshap suggested. More also can be done to reduce discriminatory tax and regulatory frameworks in areas like banking and insurance and promote more efficient tax administration and dispute resolution processes, he said.
Integrating into global value chains is a delicate balance between increasing competitiveness of domestic industry and opening the economy to trade. Building 100 new cargo terminals will make it easier and less costly for manufacturing inputs to enter the country. The increase in the PLI scheme for solar manufacturing is also a step in the right direction. But phasing out customs exemptions without lowering tariffs on imports like medical devices, medicines, agricultural products and steel risks slowing India’s desire to be a global competitor and may constrain its access to global markets and their large quantities of investment capital. The 12 percent increase in the capital budget expenditure for defense will help support India’s border security and Indo-Pacific ambitions, he said. Still, increasing targets for indigenisation of production may slow India’s access to the equipment it needs to safeguard its security. Making India a more friendly manufacturing environment for international defence companies will be critical, if they are to supply India’s defence needs in a prompt and efficient manner.