Jaitley urges US to firm Totalization pact on Social Security taxes.
AB Wire
India’s finance minister Arun Jaitley has come down hard on the United States over the controversial hike in H-1B visa and L-1 visa fee, terming it as “discriminatory” as it largely affects Indian IT industry.
Jaitley expressed his concern and angst over the issue in a bilateral meeting with US Trade Representative Ambassador Michael Froman, in Washington, DC.
Jaitley expressed “India’s concern over the hike in the H-1B and L1 visa fee, which is discriminatory and in effect is largely targeted at Indian IT companies,” according to a statement released by the external affairs ministry, and reported by PTI.
Last year, the US Congress imposed a special H-1B visa fee of up to $4,500 on H-1B and L-1 visas, to fund a 9/11 healthcare Act and biometric tracking system.
While agreeing on the $1.1 trillion spending Bill, Congressional leaders decided to impose a special fee of $4,000 on certain categories of H-1B visas and $4,500 on L-1 visas.
As per Industry estimates, Indian professionals contributed more than USD 25 billion to the US Social Security during the last decade, without being able to retrieve their contributions.
Jaitley also underlined the need for early conclusion of Totalization Agreement on social security taxes paid by Indian nationals working temporarily in the US, in his meeting with Froman.
The US has entered into agreements called ‘Totalization Agreements’ with several nations for the purpose of avoiding double taxation of income with respect to social security taxes.
Under these, professionals of both the countries would be exempted from social security taxes when they go to work for a short period in the other country. The two countries are also engaged in negotiations for a Bilateral Investment Treaty to protect investments.
The finance minister emphasized on sustained engagement and a rapidly increasing trade and investment partnership between India and the US as key elements, saying India looks forward to strengthening and deepening this economic engagement.
Jaitley is currently on an official trip to Washington DC to attend the Spring Meetings of the International Monetary Fund (IMF) and the World Bank and other sessions.
He is accompanied by RBI Governor Raghuram Rajan, Economic Affairs Secretary Shaktikanta Das, and Chief Economic Advisor Arvind Subramanian and other officials.
In Washington, Jaitley also said India may grow faster than 7.5 per cent GDP growth rate it recorded last year if predictions of above-average monsoon rainfall come true.
Indian economy, he said, registered 7.5 per cent growth in 2015-16 notwithstanding contraction of global exports and two consecutive years of monsoon deficit.
If the predictions of good monsoon were to come true, “we are capable of… improving upon our growth rate”, he said speaking on the theme of ‘Steering India towards Growth’ at an event organized by the Carnegie Endowment for International Peace, on Wednesday.
Jaitley said amid a weaker outlook across the globe, India’s experience of strong economic growth, comfortable price situation, low current account deficit, and adherence to a fiscal recovery path have projected it as an outpost of opportunity for global investors.
He said the current growth rate of 7.5 per cent was not enough as per its own requirement standard and the country has the “potential” to do “better”.
Expressing concern over the decline in India’s exports, Jaitley said the country’s growth parameters are on track and the government is moving ahead on its reform agenda with inclusiveness and successfully meeting all its fiscal parameters.
“… in the current situation, are we doing well? The answer is yes. But by our own requirement standards, are we doing well enough? I think, we can do better,” he asserted, adding that in an adverse global situation, probably one does settle for that rate.
In a globally adverse environment, India has managed to sustain growth “by putting some domestic policies in place, by using investments and surpluses cleverly”.
“One of the biggest areas of worry has been the declining exports,” the finance minister added.
Noting that the global situation has impacted exports, both in value and volume terms, Jaitley felt that things could improve if some of the variables change.
“If hopefully with any of these variable factors – growth returning to the rest of the world, better Indian monsoon and continued favorable environment of oil prices – and the impetus of policy direction in India and if the reforms go on… our ability to do much better would be there,” Jaitley said.
Welcoming Jaitley, Carnegie president William Burns, former deputy secretary of state, said India has a very important role to play globally, particularly in Asia. India has surprised China by emerging as the fastest growing emerging economy of the world, he said.
“Two years after the BJP came to power, there is change in India’s economic situation. Under the leadership of Prime Minister Modi and Jaitley, India today is the world’s fastest growing major economy,” Burns said, adding that inflation has moderated and the government is committed to reforms.
When the current government had taken over about two years ago, Jaitley said, the situation looked quite challenging, but since then the global situation has never been helpful.
In the 21 months, the key emphasis of the Modi government has been “decisiveness, consistency in terms of policy direction and transparency in functioning”.
“In terms of economic direction, this government is yet to commit a major mistake,” Jaitley said.
3 Comments
This pathetic dog of a minister must be fuming over the fact that now he cannot collect bribes to send rich Gujjus over to the US – it’s too expensive now!
Oh boo hoo, go cry to your mother.
Wow – Calls of discrimination by an Indian no less. Do Indians in the US ever discriminate against native US citizens of all other races besides Indians? Methinks thou doth protest too much…