USISPF Welcomes India’s Interim Budget as a Statement of Responsible Fiscal Management in an Election Year

The US-India Strategic Partnership Forum (USISPF) has praised the Interim Budget 2024, describing it as a responsible approach to fiscal management amidst an election year, with no major policy changes. Mukesh Aghi, the CEO and President of USISPF, commended the stability in taxation policies and expressed hope for their continuation beyond the upcoming fiscal year starting April 1, 2024.

In a statement, Aghi applauded the budget’s consistency and its focus on growth, highlighting the projections of a narrowing fiscal deficit and GDP growth between 6-7%. The budget’s emphasis on short-term spending for social protection and job creation, alongside medium-term growth fueled by increased capital expenditure, was also acknowledged by USISPF.

The forum expressed confidence that these priorities, combined with fiscal consolidation, would bolster India’s macro-economy, decrease government borrowing costs, and facilitate increased foreign trade and investment, strengthening the US-India partnership. USISPF particularly praised the government’s attention to infrastructure, inclusive growth, and fiscal prudence.

Furthermore, USISPF noted the budget’s increase in capital expenditures by 11.1%, reaching USD 133.9 billion, with a significant allocation of USD 130 billion for infrastructure projects. These investments are expected to attract private investment, including foreign direct investment from the United States, into crucial sectors such as roads, rails, ports, and airports.

The President of USISPF also recognized the budget’s social spending initiatives, such as the construction of 20 million affordable houses over the next five years, which would stimulate rural employment and the construction sector.

Additionally, the forum appreciated the government’s efforts towards clean energy goals, including providing free rooftop solar-generated electricity to 10 million households. Investments in healthcare, education, and manufacturing sectors, including through the Production-Linked Incentive (PLI) schemes, were highlighted as crucial for attracting high-end tech manufacturing and building resilient supply chains, aligning with priorities of both Washington and New Delhi.

Regarding revenue, USISPF noted the budget’s avoidance of significant tax policy changes, maintaining steady rates for the middle class and the corporate sector. Aghi welcomed the policy of tax stability and the extension of tax benefits, anticipating their positive impact on investment and job creation.

In conclusion, USISPF welcomed the budget’s efforts to leverage the start-up ecosystem and promote India as an attractive destination for long-term funds from sovereign wealth and pension funds, urging the continuation of these policies beyond the upcoming fiscal year.