Last Updated:
Finance Minister Nirmala Sitharaman presented the Union Budget 2025-26 on Saturday in which she announced reforms in various sectors, including tax reforms.
Finance Minister Nirmala Sitharaman (AP Image)
The United States-India Strategic Partnership Forum (USISPF) has lauded the Union Budget 2025-26, describing it as a “strong blueprint” for enhancing the country’s growth towards a $5 trillion economy.
It said that the Budget, through its “strategic investments and landmark reforms in the tax structure”, promotes modernisation and signals to investors that India is “committed to fostering a resilient, inclusive, and globally competitive economic environment”.
Finance Minister Nirmala Sitharaman presented the Union Budget 2025 in Lok Sabha on Saturday, giving massive relief to the Middle Class which has been exempted from tax on earning up to Rs 12 lakh per annum.
The USISPF said that the Budget maintains the path of fiscal consolidation started four years ago with a projected fiscal deficit of 4.4%, down from 4.8% last year, driven by a large increase in net tax revenues and a moderate increase in expenditures.
“We especially appreciate the shift in spending priorities this year, with greater attention to domestic consumption to support growth through increased domestic demand. We welcome increased spending outlays for rural and urban development, social welfare, and development of the Northeast states, and note the more moderate increases in capital investments this year, where previous allocations to key sectors such as transportation and telecommunications continue working their way through the investment cycle,” it said in a statement.
USISPF commended reforms in financial services, technology, and agriculture that will continue to attract investment and promote innovation in critical sectors across the economy.
“We welcome the government’s plan to establish a new Centre of Excellence for Artificial Intelligence (AI) for education, which ties into previous announcements of similar Centres of Excellence in AI for agriculture, health, and sustainable cities. AI will play a key role in strengthening technological ties between the United States and India, particularly as the partnership grows through initiatives like the Initiative for Critical and Emerging Technology (iCET),” it said.
“USISPF also appreciates the government’s decision to remove the cap on foreign direct investment and simplify the governance constraints in the insurance sector. This landmark reform will unlock fresh capital, drive innovation and investment, expand nationwide insurance penetration, and send a clear signal that India is committed to creating a globally competitive and investment-friendly sector,” it added.
Dr. Mukesh Aghi, President and CEO of USISPF, said, “USISPF is confident that the budget will accelerate India’s economic growth, drive increased investments, job creation, and innovation, while further cementing its status as a global economic powerhouse. We eagerly anticipate the positive impact of these measures on the Indian economy attracting more American investments into India and the deepening of economic and commercial ties between our two democracies. USISPF remains steadfast in supporting the government’s vision for a prosperous and inclusive India”.
He added, “The comprehensive measures—from removing the FDI cap in the insurance sector and simplifying KYC processes to increasing the income tax limit—are set to stimulate economic activity, boost consumer spending, and revive the ‘animal spirit’ of the economy.”
Tarun Bajaj, Chairperson of the US-India Tax Forum, added, “The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, lays out a roadmap for boosting consumption and accelerating growth and employment. It has a strong focus on simplifying the tax regime, boosting domestic manufacturing, and on ease of doing business/deregulation and decriminalization. The budget emphasizes “Make in India, make for the world” and aims to strengthen India’s position as a global economic powerhouse”.
Bajaj added, “A cornerstone of the budget is the announcement of the new Income Tax Bill, designed to simplify the tax laws. International taxation reforms aim to create a more favorable environment for cross-border businesses. Expanded safe harbor rules and rationalization of TDS and TCS provisions are expected to reduce complexities and encourage foreign investment.”
