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from India Insight:
L&T Infra Finance CEO upbeat on India’s economic recovery by 2015
India's economy recorded its slowest growth in a decade in the fiscal year ending in March but the CEO of L&T Infrastructure Finance, that provides loans to companies such as Jaypee Group to develop roads and other infrastructure, is hopeful of an economic turnaround in less than two years that will boost business prospects.
The company, part of India's largest engineering and construction conglomerate Larsen & Toubro, will likely end up dealing with a slowdown in business growth in the current financial year, but might bounce right back next year if the winner of India’s federal elections due in 2014 starts spending on infrastructure projects.
Reuters spoke to Chief Executive Officer Suneet Maheshwari about his outlook for the industry and the Indian economy. Here are excerpts from the interview:
Q: What is your outlook for the industry?
A: It is difficult to imagine for any individual that we will always be doing good. Sometimes you will have a viral attack. Business is also like that. To believe that this will pass off in one year for the world and for India will be extreme short-sightedness and lack of understanding of what the real world is ... I know it is dismal, but which country in the world is showing 5.3.-5.4 percent growth? This year I believe, with whatever Chidambaram is doing, we will hit 6 percent growth.
I personally feel that this view about India by ratings agencies - to put it on a pathway to downgrade or a watch towards a negative outlook - that is being too severe on India. And those who are doing it have probably not understood India very well.
from Global Investing:
India’s deficit — not just about oil and gold
India's finance minister P Chidambaram can be forgiven for feeling cheerful. After all, prices for oil and gold, the two biggest constituents of his country's import bill, have tumbled sharply this week. If sustained, these developments might significantly ease India's current account deficit headache -- possibly to the tune of $20 billion a year.
Chidambaram said yesterday he expects the deficit to halve in a year or two from last year's 5 percent level. Markets are celebrating too -- the Indian rupee, stocks and bonds have all rallied this week.
from India Insight:
Taxing times for reporters on the Chidambaram beat
(Any opinions expressed here are those of the author and not necessarily of Thomson Reuters)
Finance Minister P. Chidambaram’s drive to shore up government coffers is not just giving businessmen sleepless nights.
from Expert Zone:
India Markets Weekahead: Beware the Ides of March
(Any opinions expressed here are those of the author and not of Reuters)
Markets ended budget week below support levels of 5800/5840 and just when the six-month rally seemed over for good, it made a spirited V-shaped recovery to close at 5946 on Friday, with gains of 3.95 percent. The Street is divided with some expecting this to be the beginning of a new rally with the market scaling highs that it missed in February; others see it as a strong pullback which will fizzle out soon.
The government seems to be responding faster to allay investor fears. It was quick to respond to FII worries over proposed changes in tax residency certificates. Finance Minister P. Chidambaram has been assuring investors of continued policy measures, including the Direct Taxes Code (DTC) bill being introduced in the current parliament session.
from Expert Zone:
Budget 2013: Political strategy, not economic blueprint
(Any opinions expressed here are those of the author and not of Reuters)
With the dust settling after Budget 2013, the picture is getting a bit clearer. Opinions on the budget have ranged from praise to outright criticism. The true position lies somewhere in between -- depending on one’s political inclination, views on the finance minister and one’s financial interests.
Most agree there is considerable misalignment between diagnosis and prescriptions in the budget. The three biggest problems identified by P. Chidambaram are:
- rising fiscal deficit that needs to be controlled
- high current account deficit and
- declining economic growth rate.
from Expert Zone:
Risk factors in Budget 2013
(Any opinions expressed here are those of the author and not of Reuters)
Finance Minister P. Chidambaram has apparently done the impossible. He has brought down the fiscal deficit in the current year from the budgeted 5.3 percent to 5.2 percent in spite of the fall in revenues. What’s more, the deficit was further slashed to 4.8 percent in the 2013/14 budget. Is that realistic?
Look at the expenditure. In the current year, subsidies on food, petroleum products and fertilizer were up by 676 billion rupees or 36 percent. These are precisely the expenditures the minister had to curtail, though he did make an effort to do that too late in the day. With the jump in non-Plan expenditure, the fiscal deficit could be brought down only by cutting Plan expenditure.
from Expert Zone:
Budget 2013 not a death knell for reforms
(Any opinions expressed here are those of the author and not of Reuters)
In announcing the new budget, Finance Minister P. Chidambaram tried to square the circle. On the one hand, with the prospect of elections next year or possibly sooner, handing out costly goodies was always going to be a temptation. On the other hand, like its Western counterparts, the Indian government was faced with the fact that it must rein in public spending, which could anger some voters, not to mention dampen economic growth.
The trick, therefore, was to cut spending on areas where the negative impact would be least damaging. On that count, the budget met our expectations. We had long thought the deficit could be cut from 5.2 percent of GDP to 4.8 percent in 2014. And while the underlying nominal GDP growth assumption of 13.4 percent may be a stretch, we didn’t think it was beyond the realm of possibility.
from Expert Zone:
Budget 2013: A high-calorie budget
(Any opinions expressed here are those of the author and not of Reuters)
India’s left-leaning government believes in the ‘eat more, burn more’ philosophy in managing its finances. Budget 2013 takes that idea further with an even stronger projected rise in spending.
If the increased spending is aimed at productive use, it may still end up doing some good. But the track record does not inspire confidence. I hope that after talking the talk, the finance minister will not lose his nerve when it’s time to walk the walk.
from Expert Zone:
Budget 2013 does have some words of wisdom
(Any opinions expressed here are those of the author and not of Reuters)
The finance minister had a tough job in hand with this being the government’s last budget before elections due in 2014. P. Chidambaram had to focus on fiscal consolidation while walking a tightrope between populism and pragmatism.
In my previous column, I had written about the issues he needs to address. Here’s a look at how Budget 2013 fared on these counts.
from Expert Zone:
Budget 2013: An opportunity missed
(Any opinions expressed here are those of the author, and not necessarily of Thomson Reuters)
Industry leaders have hailed Budget 2013 saying that this is the best Finance Minister P. Chidambaram could have done under the circumstances. Opposition leaders have slammed the budget. Each had their own compulsions but I feel the truth lies somewhere in between.
