New Delhi (NVI): The US-India Strategic Partnership Forum (USISPF) hailed certain aspects of the Budget 2020 but said the government could have gone further to liberalize some sectors, like insurance.
“USISPF is pleased to see a focus on inclusive growth, aspirational India, ease of living for all citizens, and digital technologies for economic growth in the 2020 Union Budget,” USISPF President and CEO Mukesh Aghi said.
“However, we believe the budget could have gone further to liberalize sectors such as insurance that are in need of capital. Despite a slowdown in growth, the global outlook for investment in India remains strong and therefore the budget was a great opportunity to convert the global sentiment into action,” he said.
He said that on corporate taxation, it is pleasing to see the elimination of the dividend distribution tax.
“On ease of doing business, measures such as simplified GST returns, no audit requirement for MSMEs with up to Rs 5 crore turnover, instant issuance of PAN by furnishing Aadhaar Card, pre-filing of tax returns, faceless appeals and assessments will further enhance India’s image from an ease of doing business perspective. Together, these steps show that India’s tax policy is moving in the right direction,” Aghi said
Aghi said provisions such as creation of an “Investment Clearance Cell” to facilitate investment advisory and continued focus on smart cities projects and electronics manufacturing is playing an important role in growing the Indian economy and creating much-needed jobs.
As the USISPF hi-tech manufacturing report has indicated, India’s hi-tech manufacturing sector has the potential to offer an additional investment of USD 21 billion and create 5,50,000 direct jobs and 14,00,000 indirect jobs over the next 5 years.
However, the USISPF also urged government to move away from further tariffs on ICT products in the budget.
The government is taking measures to boost infrastructure spending, creating a national logistics policy, and modernizing India’s connectivity. Improving India’s logistics and infrastructure build-out is one area where American companies can contribute significantly.
USISPF is encouraged to see a focus on digital infrastructure that will enable private sector to build data center parks throughout the country as well as public funding for the Bharatnet program. The government’s attempts to bolster public consumption through tax holidays on the profit earned on affordable housing projects, optional tax relief to middle income tax payers, rationalizing the tax rates and increasing the disposable income in the hands of the middle class are welcome moves.
Startups continue to be the engines of growth for the Indian economy— deferring the tax payment on ESOP granted to employees; and increasing the revenue threshold to Rs 100 crore for claiming profit exemption for a period of 3 years out of first 10 years will allow startups to create jobs and attract more skilled talent. USISPF will work with the government on additional steps it can take to further boost the startup ecosystem in India.
“E-commerce is a bright spot of the Indian economy and expected to touch $84 billion by 2021. We therefore, urge the government reconsider its decision to impose 1% TDS on e-commerce. This creates differential treatment of sellers on these platforms and the burden will be ultimately passed on to the consumer,” the statement read.
