IndiaPost.com - USIBC calls India Budget 'compassionate'

NEW YORK: Fully appreciating India's emergence as a powerful knowledge economy juxtaposed against the fact that more than 600 million of its population derive livelihoods from tilling the land, the United Progressive Alliance (UPA) coalition on Feb 29 delivered a compassionate, pro-people budget that will bring smiles to the young and old and farmers alike - while not disturbing the boom underway in the corporate sector, according to the US-India Business Council (USIBC).

Finance Minister P. Chidambaram read aloud his budget speech before a sometimes raucous Parliament, emphasizing that "knowledge is power" and demonstrating the government's commitment to "inclusive growth" - with an emphasis on building up the country's soft infrastructure, including the allocation of major expenditures on education, providing tax holidays for public health initiatives and hospital development, and granting budget outlays for clean water and desalination projects.

The author of the country's so-called "dream budget" of 1997 when the Finance Minister served in a different coalition, this year's 2008-2009 Budget will be remembered for its focus on agricultural productivity, including its provision for major irrigation schemes, restoration of irrigable land, as well as a colossal waiver of outstanding debt owed to banks by small farmers. The debt waiver of more than $15 billion in loans to small farmers announced by the Finance Minister caused Parliament to erupt in pandemonium.

Opposition party officials loudly accused the Finance Minister of indulging in political opportunism. The 2008-2009 Budget leaves tax rates for corporations largely unchanged. Excise taxes will be reduced for small cars, providing a boost to auto manufacturing.

Duties for most goods will remain at current levels - with the exception of reduction certain drugs and pharma manufacturing equipment, irrigation technology, and naphtha for fertilizer feedstock. USIBC's President, who is in India's Capital attending the 6th High Technology Cooperation Group meetings hosted by the Union Ministry of External Affairs, summed up the 2008-2009 Budget, saying "The Finance Minister's emphasis on education, public health, and agriculture makes this a compassionate budget - one that will sustain growth while demonstrating the government's commitment to ensuring that all segments of society benefit from the vitality underway in the present economy." For three years running, India's GDP continues to be running at 9% plus. Foreign exchange reserves are now greater than $200 billion.

US-India two-way trade has surpassed $40 billion. The Budget Session of Parliament must approve the 2008-2009 Budget by first week May, before monsoon recess. The USIBC, formed in 1975 at the request of the Government of India and the US Government, is the premier business advocacy organization representing 275 of the largest US companies investing in India, joined by two dozen of India's largest global companies, whose mandate is to advance US-India commercial ties.

The US-India Business Council celebrates its 33rd Anniversary "Global Partnership" Summit this year in Washington, D.C. on June 12, 2008.