Washington: The State of the Union Address by Barack Obama could have serious implications for Indian economy in the coming future. The annual speech laid down the agenda of the Barack Obama’s administration for the next year.
Determined to bring a struggling economy back on its feet, Obama hinted at a series of economic reforms that might repercussions in India.
In his annual State of the Union address, President Barack Obama stressed on the need to develop jobs within American shores. He advised tax cuts for US companies doing business in America and employing workforce from US.
President Obama laid down the framework to build an economy 'that is built to last'. He focused on American Manufacturing, American energy, skills for American workers and renewal of American values.
Barack Obama cited the example of Ford, General Motors and Chrysler and said that an industry on the verge of getting extinct was brought back to life.
He said the same model can be replicated for other industries as well.
Obama said that he America is ready to bring back manufacturing jobs from overseas.
"So we have a huge opportunity, at this moment, to bring manufacturing back. But we have to seize it", Obama said.
Obama questioned the tax policies. He said that companies moving jobs out of America should not get the benefit of tax cuts.
"Right now, companies get tax breaks for moving jobs and profits overseas. Meanwhile, companies that choose to stay in America get hit with one of the highest tax rates in the world. It makes no sense, and everyone knows it", Obama clarified.
He said that moving jobs outside will not entitle companies to escape the tax regime.
"From now on, every multinational company should have to pay a basic minimum tax. And every penny should go towards lowering taxes for companies that choose to stay here and hire here", he stressed.
He announced a series of benefits for companies choosing to stay within US, and do business in America.
"If you're an American manufacturer, you should get a bigger tax cut. If you're a high-tech manufacturer, we should double the tax deduction you get for making products here. And if you want to relocate in a community that was hit hard when a factory left town, you should get help financing a new plant, equipment, or training for new workers," Obama said.
Expand market for US goods
America is looking to expand the market for its product all across the globe.
"I will go anywhere in the world to open new markets for American products", Barack Obama said.
He asked to clamp down on movies, music and software piracy. He gave the example of stopping the onslaught of Chinese tires flooding the American market, because of which thousands of Americans could find employment.
To counter, Barack Obama announced setting up of Trade Enforcement Unit. The Unit will investigate unfair trade practices in countries like China.
He urged American people to seek and impart training and create a skilled workforce that can be directly employed. He spoke about simplifying training programs that will create the manpower that has the requisite expertise.
Many companies have been roped in to deliver such training to people in relevance to the need of local businesses.
"It's time to turn our unemployment system into a reemployment system that puts people to work", he concluded.
Developing business opportunities within American shores has long been an agenda of Barack Obama's administration. It was a prime issue in his election campaign for the second term as President, last year.
Recently, Barack Obama stressed on the need to discourage outsourcing of jobs to help shore up US economy, in a World Economic Forum debate, in Davos.
America shares 59% of the total outsourcing business in India. The largest chunk of the outsourcing business is in IT-sector. Manufacturing industries constitute 9% of the total revenues generated from the outsourcing boom, in India.
In the photograph, US President Barack Obama delivers his State of the Union speech on Capitol Hill in Washington. Image Courtesy Reuters