Innovative bold and stellar budget to take India to a stronger growth trajectory: USISPF President

FM Sitharaman presented her fifth Union Budget on Feb 1, 2023.

The innovative, bold and stellar budget presented by Union Finance Minister Nirmala Sitharaman will take India to a stronger growth trajectory, the head of a top American India-centric strategic and business advocacy group said Thursday.

Applauding the finance minister, the US India Strategic and Partnership Forum (USISPF) said the budget is a blueprint for the year, outlining the vision for the next 25 years leading to the centenary of India's independence (2047).

"The Budget announced today by the government was innovative, bold, and stellar. It takes India to a stronger growth trajectory over the next few years," Mukesh Aghi, President of the USISPF said.

"India's rise from the tenth to the fifth largest economy is a hallmark of the bright economic spot in a period when other economies are suffering from global economic headwinds," Aghi said.

"Fiscal consolidation continues, which means there will be more capital available for private investment that will bring interest rates down," he said.

"The Budget will give more benefits to the youth, and senior citizens, and focuses on women's empowerment. This Budget is job-focused and will have a tremendous impact on India's GDP. I applaud the government on a growth-focused Budget," Aghi said.

The USISPF said the term 'Amrit Kaal' was first used by the Prime Minister in 2021, to describe an 'auspicious time' or a  'time of nectar', alluding to Prime Minister Modi's vision for India's next quarter-century.

'Amrit Kaal' is described by the government as the 25 years culminating in the centenary of India's independence.

Finance Minister Sitharaman said the government aims to transform India into a developed country and spoke about progress in the nine years of the Modi government, whereby India has increased in size and stature going from the 10th largest to 5th largest economy in the world. Giving some of the highlights of the Union Budget 2023-24, USISPF said it provides a roadmap for stability, growth, and development. The seven priorities and the economic agenda pave the way for India @100 giving a strong impetus to growth, job creation, and stabilising the macroeconomy amidst global headwinds.

The Union Budget has taken into consideration the needs of all sectors of the economy, reflecting the Indian government's commitment towards a prosperous and inclusive India. Increased government spending in critical areas of the economy such as agriculture, green energy and infrastructure, education, and new-age technology adoption are indeed welcome announcements towards India @100, it said.

The capital spending increase to about USD122.3 billion, which would be 3.3 per cent of gross domestic product (GDP), in the next fiscal year starting on April 1 will be the biggest such jump after an increase of more than 37% between 2020/21 and 2021/22. Amidst an anticipated slowdown in the global economy, an increased allocation of capital spending can act as a protective strategy, it said.

Budget 2023-24 tax amendments aim to bring in a predictable and stable tax regime.

The proposal of a lower tax rate of 15 per cent for new cooperatives that start manufacturing activity in March 2024, rationalisation of TDS provisions, and extended tax benefits for start-ups will help in bringing in business growth and certainty. Several changes in the customs duty rates are done with a clear focus on bringing in supply chain efficiencies and enhancement of domestic manufacturing which will further promote exports, USISPF said.

The government, it noted, has the vision to make GIFT-IFSC a global hub for financial services, measures like permitting acquisition financing by units of foreign banks in IFSC are expected to reduce the cost of financing for Indian corporates looking to make an overseas acquisition.

Other measures like setting up a single-window IT system for registration and approval from various authorities; delegating powers under SEZ Act to IFSCA are expected to bring in enhanced ease of doing business in IFSC.

The Union Budget 2023-24 with an outlay of Rs 35,000 crore for green energy transition, and with the addition of the recently announced Green Hydrogen mission (Rs.19,500 crore) has reiterated the government's commitment to achieve net zero targets and focus on renewable manufacturing, USISPF said.