USIBC’s statement on 2021-2022 Union Budget
A statement from U.S.-India Business Council President Nisha Biswal following Finance Minister Nirmala Sitharaman’s presentation of the 2021-2022 Union Budget.
“Today’s budget announcement contained several bold initiatives that set the tone for an accelerated post-pandemic economic recovery and new opportunities for India’s social development. While USIBC is still studying the details, we believe many of these measures will enhance confidence in India as a long-term destination for foreign investment and boost capital inflows.
Substantial commitments to increase public spending on healthcare, infrastructure and defence should promote inclusive growth and job creation and enhance national security, helping to sustain India’s impressive economic resurgence. Plans to set up a new infrastructure development bank and sell brownfield infrastructure assets should create opportunities for US asset managers and pension funds to enhance sectors like logistics, transportation, energy and water, supporting India’s drive to become more productive, connected and sustainable. Raising the cap on FDI in the insurance sector lays the ground work for American insurance companies to enhance financial inclusion in India and provide Indians with more tools to protect themselves against risks to their lives and livelihoods.
USIBC is also eager to learn more about many of these proposed reforms to fully understand their impact. For foreign investment to flow into the insurance sector, the management and control safeguards need to strike the right balance. The plan to set up a bad bank for distressed assets could have a major impact on credit growth, the lifeblood of the economy. We’re also closely examining the tax and customs proposals to determine how they will affect India’s ability to integrate into global value chains—a critical requirement to enhance competitiveness and ensure its long-term prosperity.
Finally, it’s worth highlighting that there is also prudence backing this budget: Combined with a commitment to spend this year, Finance Minister Sitharaman identified a five-year plan to reduce the fiscal deficit to pre-pandemic levels. USIBC stands ready to work with the Government of India in the next few weeks to maximize the positive economic and social impact of today’s announcements in the year ahead.”