Budget show India's continued commitment to enhancing productivity and creating jobs: USIBC

WASHINGTON: Congratulating Union Finance Minister Nirmala Sitharaman for her proposals in the annual budget, a top American business advocacy group on Wednesday said that it shows New Delhi’s continued commitment to enhancing productivity and creating jobs. These remarks were made by US India Business Council (USIBC) president Atul Keshap after Sitharaman presented the Union Budget for 2023-24 in Lok Sabha on Wednesday, becoming the sixth minister in independent India to present five consecutive budget.

“Overall, the initiatives show India’s continued commitment to enhancing productivity, creating jobs, and capitalising on over six per cent projected growth to integrate even further into high-trust and resilient supply chains,” Keshap said. Critically, to achieve these goals, the budget embraces efficient tools and vital outcomes like increasing the use of digital technology, enhanced public consultation in regulatory processes, and climate-sensitive development, Keshap said in a statement.

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The announcement of a 33 per cent increase in capital expenditure, on top of a similar increase last year, can help drive growth, create jobs, and enhance productivity in significant ways. How this is spent, when it is spent, and the pace of project execution will be critical to maximising its impact, he said. “We see great potential to enhance logistics and regional connectivity in the plans for 100 critical transport projects and 50 air-related facilities. Likewise, the spending dedicated to India’s energy transition, net zero objectives, and energy storage will help India’s growth be sustainable and address concerns related to 24-hour power availability,” Keshap said.

Applauding the new steps to achieve India’s global export hub aspirations, he said the reduction of basic customs duty rates on goods, exemptions for automobile sector inputs, and the remediation of inverted duty structures are important measures. “Combined with reforms to simplify the indirect tax structure, eliminate criminal liability for non-compliance in this and other areas, and reduce compliance requirements, these moves are likely to make India a more attractive place to do business and increase its global competitiveness,” he said.

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Fostering a level playing field for tax and regulatory frameworks in banking and insurance, as well as promoting more efficient tax administration and dispute resolution processes, can help support these goals by increasing access to capital, risk management products, and foreign direct investment,” Keshap said. On the digital economy, the new Centres of excellence for artificial intelligence and 5G labs can be major drivers of cooperation across the US-India corridor, leveraging the two countries’ Initiative on Critical and Emerging Technologies launched here on Tuesday, he said.

“The new National Data Governance Policy to enable access to anonymised public data can unleash significant innovation provided all companies doing business in India can use this data. The history of the United Payments Interface (UPI) shows that multinational companies are significant drivers of returns from similar Indian investments in digital public goods,” he said. Noting that the steps to enhance innovation in the life sciences sector also hold promise, he said the proposed multidisciplinary courses for medical devices can help enhance human capital for product development, manufacturing, and regulation.

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A Research Linked Incentive programme, something like the government’s Production Linked Incentive scheme, could also help India’s global standing in this area, he said. “For financial services, we see great potential in several proposals. Increased financial access is likely to result from the simplification of Know-Your-Customer processes and a national financial information registry, especially if the registry leverages the expertise of private players and alternative data,” Keshap said.

Making real the Finance Minister’s commitment to public consultation in the process of developing sector regulations will reduce risk, promote efficiency, and give confidence to foreign investors provided the approach is transparent, predictable, and consistent. Expanding this commitment to regulatory processes across all sectors would constitute a sea change and help supercharge foreign investment, he said. Meanwhile, an eminent venture capitalist has said that the annual budget will bring in more foreign direct investment, benefit the country’s blossoming tech startups and help in creating jobs.

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“We foresee the Budget will yield significant benefits in job creation and in enhancing the country’s technological and competitive manufacturing capabilities, which are among the key drivers of India’s USD5 trillion economy goal,” Arun Kumar, managing partner of leading US-based venture fund, Celesta Capital, said. Indian tech start-ups will benefit from the government-initiated investments in centres of excellence in AI, the establishment of labs for 5G development, an increase of investment in research in priority areas, and a keen focus on green growth and energy transition, Kumar said.

With over 40 years of experience spanning multiple sectors, including technology, financial services, and government, Kumar for five years served as the Chairman and CEO of KPMG, India where he was a member of the global board of directors of KPMG, as well as its EMA board. He previously served in President Obama’s Administration as Assistant Secretary of Commerce for Global Markets and Director General of the U.S. & Foreign Commercial Service as the Administration’s lead official, leading a team of 1,700 professionals in 78 countries.

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“The Government of India's agriculture accelerator fund will encourage agritech start-ups by entrepreneurs in rural areas to advance innovative solutions for farmers based on technologies like AI, ML, IoT and AR/VR,” Kumar said. According to Kumar, the significant increase in capital expenditures for infrastructure, especially transportation and logistics, will enhance the country’s competitiveness to become a major manufacturing node in global supply chains.

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