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Budget 2016 Presents Solid Roadmap for Tax Simplification and Ease of Doing Business: USIBC President
Council bullish on Budget 2016 focusing on macro-economic stability, maintaining 3.5% fiscal deficit target and liberalization of key sectors
Washington, DC- February 29, 2016: The U.S.-India Business Council (USIBC) expressed that it is bullish on Finance Minister Arun Jaitley’s third budget presented in the Parliament earlier today, saying the budget is an accurate path to economic growth in a period of global uncertainty. The budget consolidates the Government’s pro-growth agenda through economic liberalization, while remaining committed to bringing in long-term investment and job opportunities in areas such as agriculture, infrastructure development and clean energy.In addition, the Council applauds the Government’s continued efforts to create a stable and certain tax environment to encourage enterprise and ease of doing business. A number of recommendations by the Easwar Committee and the Shome Committees that aim to simplify the Income Tax Act and administration of tax policy were addressed in the budget. USIBC is also pleased to see that the budget supports the removal of any retroactive taxation.
USIBC President, Dr. Mukesh Aghi said, “It is evident that the Government of India is leaving no stone unturned to build on to create an investment climate that is favorable to improving India’s ranking in the ease of doing business index. Tax reforms presented in this budget are unprecedented, and lay the road map to create an attractive environment for foreign investors. US companies are still eager for the implementation of GST that has the potential to be a game-changer for the economy. This is also an inclusive budget— one that creates opportunities for increasing domestic demand.”
He further added, “In a recent USIBC survey, approximately 20% of our member companies confirmed that have already invested over $15 billion in India since Prime Minister Modi assumed office. In 2016-17, we expect an additional $27 billion to be invested by at least 52 U.S. companies in India. We are certain that with this path of reforms, these numbers are achievable.”
On the implications of the budget on specific sectors of the economy, Dr. Aghi said, “Industry is pleased to see the Government’s efforts to encourage investment in irrigation and cold chain. USIBC believes a strong irrigation system and a robust cold chain is crucial to real growth in the agriculture sector. We are also happy to see greater investment in promoting soil health and the Pradhan Mantri Gram Sadak Yojna.”
He further added, “The Bankruptcy Code together with the code on resolution of financial firms will provide a critical resolution mechanism for the Indian economy. This will go a long way in building investor confidence.”
Applauding the government’s plan to extend the strength of the Make in India campaign to the food sector, Dr. Aghi said, “Allowing 100% FDI in the marketing of food produced in India will likely bring in new investors who will provide needed manufacturing and retailing jobs. This will help farmers increase sales, spur investment in cold chain and storage infrastructure to make sure food is better preserved, and bring new and diverse food products to a larger percentage of the Indian population than ever before.” The Council is also buoyed by expansions in infrastructure development particularly the roads and railways that can attract investment from both domestic and foreign investors. Dr. Aghi said, “Provisions for credit-rating systems for infrastructure projects, proposals to allow for renegotiation of contracts and measures for dispute resolution create prospects for long-terms investments in the country.”
About U.S.-India Business Council:
Formed in 1975 at the request of the U.S. and Indian governments, the U.S.-India Business Council is the premier business advocacy organization, comprised of 350 top-tier U.S. and Indian companies advancing U.S.-India commercial ties. USIBC is the largest bilateral trade association in the United States, with liaison presence in New York, Silicon Valley, and New Delhi.
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