U.S. India Business Council (USIBC) on Saturday said India’s Budget 2010-11 defined important steps aimed at fuelling growth and signalled that the global recession is a thing of the past.
“India’s Budget propels growth of its already robust economy — now topping 8 per cent GDP, and puts recession in the past,” USIBC said in a statement from Washington.
The new Budget lays a strong foundation for the country to attract the investment needed, spur innovation and drive inclusive growth for all of its citizens.
USIBC welcomed Finance Minister Pranab Mukherjee’s comments and feels encouraged by the Budget’s provisions.
“The key to improving the lives of Indian citizens is sustainable growth led by a vibrant and competitive private sector,” USIBC President Ron Somers said.
“This Budget’s emphasis on infrastructure, education, corporate governance and fiscal responsibility sends a message that the government is ready to take India to double-digit growth for the benefit of all its citizens,” he added.
USIBC welcomed the Finance Minister’s acknowledgement of the importance of introducing competition into the retail sector by opening it up.
“He has also outlined a clear agenda to address agricultural productivity. Moreover, the government’s commitment to ensure that the banking system is able to grow to meet the needs of India’s expanding economy is important to drive inclusive growth,” Mr. Somers said.
USIBC is especially pleased with the announcement that additional banking licenses to private sector players, including non banking financial companies (NBFCs), is under consideration, Mr. Somers said.
USIBC also welcomed the Finance Ministry’s recognition in the Economic Survey, released on Thursday, of the importance of the insurance sector in driving economic growth.
USIBC has urged the government to raise the Foreign Direct Investment (FDI) cap in insurance to 49 per cent, which is critical to attract the long-term capital investment needed to help finance India’s ambitious infrastructure plans.
The Budget also took an important step to increase collaboration between the U.S. and Indian entertainment sectors — Hollywood meeting Bollywood — by updating the customs code to reflect technological changes in the film and television industry.
USIBC expressed concerns over increases in excise taxes on a range of products. Moreover, while the fuel levy is meant to generate additional government revenue, the Council is concerned over higher energy costs triggering a rise in inflation.
Raising the Minimum Alternative Tax (MAT) from 15 per cent to 18 per cent could also act as a deterrent for infrastructure and energy investment, USIBC said, adding that it is encouraged by a balanced Budget that sets an ambitious road map to take India to the next level of growth.
