Applauding the government's plan to accelerate public sector divestment as a move that will stimulate greater efficiencies and productivity, Corporate America on Thursday welcomed India's 2013-14 budget as fundamentally sound with "some corrective steps necessary to revitalise investor enthusiasm, spur growth, and tame government spending".
The US-India Business Council (USIBC), representing 350 global companies investing in India and a score top Indian corporates, gave high marks to Finance Minister P. Chidambaram for steps being taken to consolidate India's fiscal position.
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USIBC, however, repeated its call for increased liberalisation in the insurance, pensions, defence, and retail sectors.
These actions will attract capital and technology to India, it said, pressing "for market-based incentives for India to realise its manufacturing goals" rather than the government resorting to out-dated "command-control" policies or mandates to require companies to manufacture locally.
"The government of India recognises that a growth rate of 5 per cent will not run its economic engine fast enough to create the jobs necessary to put India's young population to work," USIBC President Ron Somers said.
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Recognising this, Chidambaram "has taken some corrective steps necessary to revitalise investor enthusiasm, spur growth, and tame government spending", Somers said.
USIBC also reiterated its commitment to support India in its $1 trillion build-out of infrastructure, which will generate jobs and opportunities for both Indian and American companies, but said "in this, the private sector must play a leading role".
On the tax front, USIBC welcomed the clarity now emerging by India's adoption of the "Shome Committee recommendations, which stipulate clear guidelines defining legitimate tax planning for domestic and foreign investors".
USIBC also emphasised that "while policy direction on foreign company taxation is important, the litmus test for investors will be how such taxes are enforced and collected in a fair, consistent manner."
- With inputs from IANS