Budget will attract more FDI: US industry

Washington: The 2020-21 Budget presented by Finance Minister Nirmala Sitharaman will improve the ease of doing business in India and attract more foreign direct investment, US industry leaders have said.

Presenting her second budget in Parliament on Saturday, Sitharaman offered tax breaks to foreign investors and specifically those like sovereign wealth funds who are willing to place a long-term bet on the economy.

She said the Budget was aimed at boosting incomes and enhancing purchasing power, stressing that the economy's fundamentals were strong, and inflation was well contained.

"Despite a slowdown in growth, the global outlook for investment in India remains strong and therefore the budget was a great opportunity to convert the global sentiment into action," said Mukesh Aghi, president of US-India Strategic and Partnership Forum (USISPF).

Complimenting Sitharaman for taking measures to boost investment in infrastructure sector, including digital, Aghi said the USISPF believed that the budget could have gone further to liberalise sectors such as insurance that are in need of capital.

"On ease of doing business, measures such as simplified GST returns, no audit requirement for MSMEs with up to Rs 5 Cr turnover, instant issuance of PAN by furnishing Aadhaar, pre-filing of tax returns, faceless appeals and assessments will further enhance India's image from an ease of doing business perspective.

Together, these steps show that India's tax policy is moving in the right direction," Aghi said.

Noting that e-commerce is a bright spot of the Indian economy and expected to touch $84 billion by 2021, Aghi urged the government to reconsider its decision to impose one per cent TDS on e-commerce. "This creates differential treatment of sellers on these platforms and the burden will be ultimately passed on to the consumers," he said.

Welcoming the budget, the US-India Business Council (USIBC) said that abolition of the dividend distribution tax (DDT) removes a major disincentive to foreign companies seeking to set up operations in India.