File Photo: PM Narendra Modi.
The Modi government has kindled huge interest in the US private sector on India but needs to take steps on economic reforms, including the key GST bill, as creating a more transparent and predictable tax structure is critical, a top Obama Administration official has said.
"Prime Minister Narendra Modi has taken a big stand on the global stage on essentially talking about India and its economic journey," Assistant Secretary of State for South and Central Asia Nisha Desai Biswal said, noting that after he came to power there has been a huge amount of interest in the US private sector.
"I think, the Prime Minister is probably the greatest brand ambassador for India in attracting that kind of economic interest," Ms Biswal, Obama Administration's point person for South and Central Asia, told PTI.
The world is looking for Indian economy to be a driver and engine of growth, not just for India but for the region and the world, she said, noting that the Modi government take quite a number of measures in this regard.
"Whether it is enough or not, it is not for me to judge. I think, the judge of that is in the flow of investments coming in," Ms Biswal added.
Responding to a question on the steps the Modi government now needs to take on economic reforms, she said creating a more transparent and predictable tax structure is critical.
"I understand that the GST (Goods and Services Tax) bill is a priority for the government and we hope that there will be a movement in that, because that would be a very important step in that direction," she said.
The government has set April 1, 2016 as the roll out date for the indirect tax reform GST, which will subsume excise and service tax and other local levies. The key indirect taxation reform GST Bill has been hanging fire since since 2006-07.
"Certainly, I think, you have seen an uptick in FDI (Foreign Direct Investment) and FII (Foreign Institutional Investor), but it is not sufficient to fuel the ambitious agenda that the Indian government has laid out for itself," she said.
"So I think, the question that is to be asked that what further step can really create the investor confidence to unleash the flow that would fuel the growth in manufacturing, in job creation, and the economic growth that India seeks," said Ms Biswal, the first Indian-American to be heading this top diplomatic position in State Department.
"I think the Prime Minister has recognised that he would like to improve India's standing and track record in terms of global ranking in enabling environment, ease of doing business and certainly there are places where that is easier and places where there is still quite a bit of obstacles, barriers to entry for companies that are seeking to invest.
"So those are all challenges that need to be tackled," she said ahead of the inaugural India-US Strategic and Commercial Dialogue to be held here on September 21 and 22.
"Look, I do not think any one is satisfied that India has made all of the economic reforms that it needs to make. There are certainly a fairly long agenda, a long list that the Indian private sector has, the American national private sector has in terms of what will unleash India's economic rise," she noted.
The senior Administration official underscored that the next phase of economic reforms would help in this.
"We know that that is a long journey, an arduous journey, but with a very big payoff," she acknowledged. When asked why she describes Prime Minister Modi as India's greatest brand ambassador, she said "because, he has taken a big stand on the global stage on essentially talking about India and India's economic journey".
"What I mean when I say that the Prime Minister is probably India's best brand ambassador is that he seems to have that vision and articulate that vision on the global stage, and inspires confidence in board rooms and the corridors of power that India is committed to and focused on that set of economic reforms that will unleash the Indian economy," Ms Biswal said.
She said there is a huge amount of interest in the American private sector on India.
"I have a steady stream of folks from the corporate side knocking on the door, looking for advice on accessing the Indian market on how to understand, how to navigate where India is going, what the opportunity is for American business," she said.
"We welcome that, we encourage that," Ms Biswal added. The US wants to see the two economies increasingly intertwined.
"We want to see deepening of both investment of India into the United States and investment of the United States into India," she said.
Observing that the US is bullish on India, Ms Biswal said this is because there is the domestic desire and will to get that done.
"These are not issues that will be tackled because the United States, or the international community or the external forces are pressing.
"These are issues that would be tackled because of the internal demand and we, I believe, are seeing that the internal demand starting to manifest from the Indian private sector, from the Indian entrepreneurial class that want to see these opportunities," she said.