USIBC Encourages a Budget of “Big-Picture” Economic and Fiscal Reforms

WASHINGTON--(BUSINESS WIRE)--Looking toward Finance Minister P. Chidambaram’s February 28^th Union Budget announcement, the U.S.-India Business Council (USIBC) today urged the government of India to take a broad view on the core concerns impacting investment levels in the country. The council underscored the need to encourage investment via strong signals to the global business community. A consequent return of investor confidence would harness the tremendous power of India’s economy to restoring growth levels.

“We strongly support the government’s continued efforts on the Goods and Services Tax (GST). We believe the GST would dramatically increase government revenue while decreasing the cost of doing business across states, creating a ‘win-win’ dynamic that will be good for the economy.”

USIBC expressed support for any actions in the Budget which would expand private sector participation in infrastructure investment, including capital markets incentives and land acquisition reforms. Citing a return to clarity on controversial tax matters, USIBC commended the framework for the General Anti-Avoidance Rules (GAAR) and indirect taxation recently provided by the Shome Committee, but emphasized that the final rules must be issued soon as investors require certainty that all assurances will be made into law. The council confirmed that deferment of GAAR implementation until 2016 allows for needed business planning and thus increases investor certainty.

“This year’s Budget presents a distinctive opportunity for India to realize the latent potential in long-awaited reforms, including in the insurance, pensions, technology, real estate, and infrastructure sectors. All economic indicators point to now being the right time. We believe in the resolve of the government to work through political challenges and kick-start the engine of jobs and opportunity,” said USIBC President Ron Somers. “We strongly support the government’s continued efforts on the Goods and Services Tax (GST). We believe the GST would dramatically increase government revenue while decreasing the cost of doing business across states, creating a ‘win-win’ dynamic that will be good for the economy.”

The U.S.-India Business Council was formed in 1975 at the request of the United States and Indian governments to advance two-way trade and deepen commercial ties. Today, USIBC is the premier business advocacy association comprised of nearly 400 of America’s and India’s top companies dedicated to enhancing the U.S.-India commercial relationship. Ajay Banga, President and CEO of MasterCard, serves as chairman of USIBC, who will lead a Chairman’s Executive Mission to India to Mumbai, Lucknow, and New Delhi on March 11-14, 2013.