By Parikshit Luthra
Budget 2023 is around the corner and the US-India Strategic Partnership Forum (USISPF) has some key asks from Finance Minister Nirmala Sitharaman and these include — promoting digital payments, reforms in healthcare and insurance segments and lastly simplifying foreign investments.
The Center for Strategic and International Studies (CSIS) recommends expediting settlement of contractual disputes, reducing import tariffs and improving infrastructure for MSMEs for ease of doing business with India.
The government has been taking steps to attract foreign companies to set up manufacturing plants in India — the government has also taken steps to simplify regulations for foreign investors.
Mukesh Aghi, President & CEO of USISPF, believes that India has a significant opportunity to attract foreign investment in the coming years. He notes that the country has the potential to target $100 billion in FDI by 2023 but emphasises the importance of a budget that is “micro-focused” on capex and infrastructure spending in order to achieve this goal.
“India is the chair of the G20, India is the fastest growing economy in the world today and there is a global disruption in supply chain. So that means it is an opportunity for India to target at least $100 billion FDI in this year itself. So that means we need to have a budget which is much more focused on capital investment and infrastructure investment. So what we are looking for is a budget which is lot more focused on growth for the next 10 years,” Aghi said.
Arvind Panagariya, the former Vice Chairman of NITI Aayog, notes that India has a great opportunity to capitalise on the “China +1” trend but emphasises the need for more liberalisation in order to make the most of this opportunity.
“China +1 is really a great opportunity for India to capitalise on the changed environment in which virtually all multi-nationals are seeking at least one more destination for their supply chains. So from that perspective, India has to continue to generally open up the economy and so the progress on the free trade agreements is extremely important. So free trade agreements and in general trade liberalisation are key,” Panagariya said.
Anit Mukherjee, an Adjunct Fellow at Wadhwani and the Chair of US-India Policy Studies at CSIS, also sees India as a beacon of stability in a difficult world. However, he cautions that a populist budget in 2023 could undermine this stability and notes that the budget should focus on enabling infrastructure, while providing foreign investors with stability in the taxation and investment regime.
Aghi also emphasised on the need for India to make dispute resolution faster and smoother, as well as making the ease of doing business much easier to match on a global basis.
Overall, these experts agree that India has a significant opportunity to attract foreign investment and become a hub for alternative supply chains in the coming years. However, they also stress the importance of liberalisation and a focus on infrastructure and ease of doing business in order to achieve this goal.
More information
https://www.cnbctv18.com/economy/budget-2023-capex-infrastructure-spending-usispf-nirmala-sitharaman-15787551.htm