Washington, Feb 1 (PTI) The initiatives announced by Finance Minister Nirmala Sitharaman in her interim Budget on Thursday are examples of the Indian government's outlays aimed at increasing job creation and productivity, the US India Business Council said, observing that India’s ongoing focus and execution on budget consolidation is important for maintaining and enhancing its credibility with foreign investors.
The interim budget contained several notable programmes and milestones that built on momentum from prior years, USIBC president Atul Keshap said.
There was a strategic focus on technology, green growth, and infrastructure, as well as a commitment to public health and macroeconomic stability, he said.
“Combined, these are likely to contribute to India’s prosperity through sustainable growth, increased productivity, reduced logistics costs and enhanced personal well-being. They also complement the major bilateral initiatives that are likely to drive cooperation between India and the United States this year, such as the Initiative on Critical and Emerging Technologies (iCET) and the Innovation Handshake,” Keshap said.
The USIBC head commended the Indian government’s continued commitment to developing the country's semiconductor ecosystem and accelerating its ‘deep tech’ sector through additional financial support and public-private partnerships. Both position India to make an even stronger contribution to iCET, he said.
The deep tech capital guidance fund is likely to have its greatest impact if it creates attractive avenues for foreign investors to contribute capital and expertise. "We also look forward to learning more details about the significant commitment of USD 12 billion to long-term low or no interest financing for so-called ‘sunrise sectors,’ which has significant potential to enhance innovation," Keshap said.
Observing that sustainable growth is critical to ensuring that India’s economic expansion supports individual well-being, the USIBC chief lauded the vision of bringing clean energy generation and use to peoples’ doorsteps through rooftop solar power for 10 million households as well as viability gap funding for one gigawatt of wind energy.
The emphasis on promoting green manufacturing of alternative materials through biomanufacting and biofoundaries is also a step in the right direction. These demand signals can help promote India’s leadership of the green economy and integration into its global value chains, he said.
“These initiatives, along with the 11 per cent increase in capital expenditure — a real rupee increase on top of massive growth in prior years — are all examples of government outlays aimed at increasing job creation and productivity, especially to the extent the capex enhances transportation infrastructure and multi-modal connectivity. Universal vaccination to prevent cervical cancer is a critical step in ensuring a healthy workforce and equitable society,” Keshap said.
Presenting a vote on account for 2024-25 in Parliament, Finance Minister Sitharaman proposed no changes in income tax rates for individuals and corporations, as well as customs duty.
She hiked capital expenditure to Rs 11.11 lakh crore for 2024-25 while trimming the fiscal deficit for this financial year to 5.8 per cent, from the budgeted 5.9 per cent of GDP, and further lowering it to 5.1 per cent in the next fiscal.
“India’s ongoing focus and execution on budget consolidation, including beating its fiscal deficit target for this past year, is important to maintaining and enhancing its credibility with foreign investors. This is likely to have a net positive impact on the ultimate allocation that Indian sovereign bonds receive as they are incorporated into benchmark international indices in 2024, which, in turn, would deepen the country’s capital markets and reduce public financing costs,” Keshap said.