Lauding India's budget, the head of a top Indian-American business advocacy group has said it will accelerate growth, boost manufacturing and make sectors like health and real estate lucrative for foreign investors.
"We applaud the budget. The reason we applaud is that it's going to accelerate the growth in the Indian economy," Mukesh Aghi, president of US India Strategic and Partnership Forum (USISPF), told PTI in an interview.
He said a majority of Indians lived in rural areas and the whole health programme means that people will have insurance there which will further drive growth.
Commitment to build one core housing is going to create jobs, he said, adding that putting duty on completed item will push industry to manufacture more in India.
Aghi said that the new policies would give further boost to 'Make in India', a programme launched by the government in 2014 to encourage companies to manufacture their products in India.
"Committing to maintaining a 3.3 per cent fiscal deficit is a strong message to the world in development in some kind of fiscal discipline also. I would say it's a good budget. It's a budget which is inclusive. So we applauded it," Aghi said.
He said after the health care sector will become lucrative for international investors and bring in more foreign direct investment to India.
Real estate is another sector, which will be lucrative for international players, he said.
"On the consumer goods side, things will move very strongly. That's where US companies can play a very very strong role," Aghi said.
"I think taking up duty on manufactured goods will have an impact, but not a big impact because the buyers if they're buying Apple phone, both the supplier and the buyer will adjust and find the right balance. So I don't think that will get impacted but it's going to nudge companies to basically look at more manufacturing in India," he said.
Aghi said many companies, including Apple, were looking at India for manufacturing.
The cost of labour had gone up in China and they want to be closer to the consumer market, he said.
"So I think Apple has been seriously discussing with government of India to bring manufacturing into India itself. From that perspective, what I feel is you will see a strong momentum of bringing manufacturing into the country," he said.
Aghi said there will be a slight dip initially on manufactured goods coming into the country.
"But both sides will adjust and find the right balance. Because the target market which buys this high end equipment may not be impacted by the budget constraint itself," he said.
Aghi said the initial reaction from the US companies was very positive.
"The US companies are saying that this will take India's growth to above seven per cent. The consumer will have more spending. That means it will create demand for a lot of US goods," Aghi said.
This budget will drive consumer spending, revive the economy to more than seven per cent and that is attractive to US companies, he said.
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