Nisha Biswal on the Union Budget 2020-21 Announcement
A statement from U.S.-India Business Council President Nisha Biswal following Finance Minister Nirmala Sitharaman’s presentation of the 2020-2021 Union Budget.
“USIBC welcomes the Government of India’s 2020-2021 Union Budget, which introduces a variety of reforms to promote investment and enhance the Ease of Doing Business. Coupled with major policy announcements unveiled by Finance Minister Sitharaman last fall, the government has taken notable steps to stimulate India’s economic growth in the years ahead.
As the first full-year budget since Prime Minister Modi’s reelection in 2019, the 2020-21 Budget provides important insights into the government’s priorities for the next four years. USIBC was particularly pleased to see the Budget address a number of areas where the Council has urged reform on behalf of its members. These include an effort to double farmers’ income and develop a technology-enhanced agriculture ecosystem; a renewed commitment to transportation infrastructure through the National Infrastructure Pipeline; investments in advanced and emerging technology; and expand connectivity, technology, and smart cities that will underpin India’s $5 trillion digital economy.
We welcome the government’s decision to abolish direct dividend taxes and streamline the process for Goods and Services Tax (GST) filing, which will ease compliance burdens and make India a more attractive investment destination. Our members also positively note the new Tax Dispute Resolution Scheme, and anticipate implementation of mechanisms that improve tax predictability and certainty.
While USIBC had hoped to see an increase in the foreign direct investment (FDI) allowance for the insurance sector in the budget proposal, we look forward to continued engagement with the government on reforms that are needed to bring fresh investment in a critical sector. Recognizing that India is operating under fiscal constraints, the Council continues to advocate for greater investment of resources to modernize India’s defense industry and shore up the auto manufacturing sector, a critical driver of India’s growth.
The Council also remains concerned about the many new tariffs, fees, and cesses introduced in the Budget. These new tariffs touch agricultural goods, medical devices, automobile parts, electronics and electric vehicles. Both USIBC and the U.S. Chamber have long maintained that tariffs raise prices for consumers and create friction with trade partners, ultimately inhibiting economic growth.
The U.S.-India Business Council has been a part India’s growth story for 45 years since our founding in 1975. We believe that the economic outlook is strong, and India will remain a global destination for business and investment in the decades to come. We look forward to serving as a partner in that growth.”