The maiden Budget of the Modi Government has been hailed by American experts and corporate sector here as a step in the right direction to generate employment and foster growth.
They said Union Finance Minister Arun Jaitley has opened the door to a much wider level of US involvement in India’s development plans in the coming years.
“Balanced, measured, and thoughtful: a terrific first budget for the Modi government.
“American investors are now revitalised by the positive changes taking shape in India,” said long-time India watcher Ron Somers of the recently formed India First Group.
Hailing the decision to increase the FDI caps in both insurance and defence sectors from 26 percent to 49 percent, Somers said though the opening of the latter will eventually be needed to truly facilitate greater transfer of technology – but this sends a very positive signal, especially combined with India’s announcement to increase Defence spending.
“Now, if only we can genuinely deepen Indo-US collaboration in the Defence Sector, with India looking to the United States for new artillery and helicopters, transport aircraft, guided missile technology, and speciality radar to beef-up India’s homeland security capability – from companies like BAE Systems, Boeing, UTC, Raytheon, and Lockheed, all working closely to establish domestic manufacturing capacity with India’s vital private sector and capable DPSUs,” Somers said.
Rick Rossow from the Center for Strategic and International Studies (CSIS) wished the government had seized the moment to take more robust steps by allowing greater than 49 percent FDI in defence manufacturing, and by repealing the retrospective applicability of the 2012 amendments to the Income Tax Act.
“But there were a few very nice surprises. Most notably, the relaxation of conditions necessary for foreign investment in construction.
“To me, this may open the door to a much wider level of American involvement in India’s development plans in the coming years,” Rossow said.
“In studying the details of the various proposed changes in the Budget, a strong narrative emerges- a long pattern of range of changes that should play a small part in helping to stimulate manufacturing, such as cutting the costs for some types of capital equipment and intermediate goods,” he said.
“This budget is a step in the right direction to generate employment and foster growth,” said Karun Rishi, president of the US-India Chamber of Commerce.
“Our expectation of growth oriented budget with fiscally prudent policies to curtail deficit and inflation have been met. It was a fine balancing act,” he said.
Key initiatives announced in the budget need to be executed in a time bound manner along with pro-growth and fiscally prudent monetary policy, he said.
Rishi said “Health for All” is a noble goal but has to be matched with higher budgetary allocation.
“Focus on capacity building and infrastructure development in terms of new AIIMS and increasing FDI in insurance will have a long term positive impact on the healthcare sector.
“The Finance Minister must increase outlay on health in the future budgets and treat it as a priority sector,” Rishi added.