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from Breakingviews:

Spending hike is best part of low-key India budget

By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The new Indian government’s maiden budget fell short of the hype. But Narendra Modi’s administration earmarked substantial sums for new infrastructure, which should revitalise growth.

The July 10 budget was the most important financial test for Modi since his Bharatiya Janata Party won power with a sweeping mandate in May. Yet it lacked the far-reaching reforms many economists and investors wanted. Finance Minister Arun Jaitley gave no hard deadline for introducing a federal sales tax - a long-delayed reform which would stimulate growth and allow manufacturers to sell more easily across India’s 29 states. And rather than tackle ballooning subsidies and handouts, Jaitley pushed the problem to a new commission.

Still, he did attend to some crucial tasks. Insurance and defence-related manufacturing will be opened to greater foreign participation. And the tax code will no longer be tweaked retrospectively. This removes a major uncertainty for investors, who were spooked by the previous government using the manoeuvre to put Vodafone on the hook for about $2 billion.

from India Insight:

Budget 2014: Give Indians tax breaks, more ways to invest – experts

Arun Jaitley's first budget as India's finance minister should allow individual taxpayers to invest more money in vehicles such as government savings bonds, mutual funds and employee savings plans, and provide them with tax credits that would bolster their savings and boost economic growth, tax experts say.

Income tax rules allow for an annual exemption of 100,000 rupees ($1,700) in investments and expenditures such as life insurance and home loan repayments, a rule that has remained unchanged for about a decade. Such investments, along with public provident funds, employee provident funds, five-year term deposits in banks and equity-linked mutual fund savings plans are good for individuals and also help keep the economy on a strong footing, said Suresh Surana, founder, RSM Astute Consulting.

from India Insight:

VIDEO: India’s auto sector and budget expectations

India's automobile sector may have been dented by negative sales for two straight years, but the Society of Indian Automobile Manufacturers (SIAM) is hoping to see an uptick in sales this fiscal year.

Spiralling inflation and expensive bank loans, which most Indians depend on to buy vehicles, weighed on customer sentiment as the country’s economic growth languished at 4.7 percent in the December-quarter -- about half the rate of India’s boom years.

from India Insight:

When the Right To Information becomes a fight for information in India

The Congress party-led government that drafted the Right To Information (RTI) Act in 2005 touted the law as one of its success stories for the average Indian in the last election. Whether it played any role in the election's outcome is difficult to say, but activists who specialize in RTI requests throughout India say that government workers have found many ways to frustrate their attempts to get responses to their questions.

Filing an RTI is easier than it used to be, but extracting information is getting harder each year, said Neeraj Goenka, an RTI activist in Sitamarhi, a town in the state of Bihar.

from Expert Zone:

National agenda to bring $100 billion of domestic household savings in capital markets in next five years

(Rajiv Deep Bajaj is the Vice Chairman and Managing Director of Bajaj Capital Ltd. The views expressed in this column are his own and do not represent those of Thomson Reuters)

Currency of different denominations are seen in this picture illustration taken in Mumbai April 30, 2012. REUTERS/Vivek Prakash/FilesIndia is an attractive investment destination for foreign institutional investors, due to its vibrant economy, favourable demographics, high growth potential and well diversified capital markets. In fact, the benchmark Nifty has representation from 10 broad sectors, four with weightage in double digits.

from Expert Zone:

India’s Iraq problem

(This piece comes from Project Syndicate. The opinions expressed are the author's own)

Iraq seems to be falling apart, with the rapid advance of the militant Islamic State in Iraq and Syria (ISIS) threatening to lead to the country’s division into Shia, Sunni, and Kurdish entities, while blurring its border with its turbulent western neighbor. Moreover, the tumult is now threatening to spread to two more nearby countries, Afghanistan and Pakistan, which already are facing myriad internal challenges. For India, the message is clear: its national security interests are at risk.

from India Insight:

Short skirts, bad stars, chow mein: Why men in India rape women

Demonstrators from All India Democratic Women's Association (AIDWA) hold placards and shout slogans during a protest against the recent killings of two teenage girls, in New Delhi May 31, 2014. REUTERS/Adnan Abidi

The 2012 Delhi bus rape case and an ever-longer list of rapes and murders in India have prompted politicians and public figures in India to cite plenty of implausible reasons why rape happens and why men brutalise women or portray women in ways that suggest they had it coming. Many people, when speaking out, tend to minimise the crime or rationalise it in ways that sound ludicrous to many. We created this list of such comments more than a year ago, but it seems like it's time to add some new entries.

(Updated July 15, 2014) Binay Bihari, minister for art, culture and youth affairs in the state of Bihar: The minister said that mobile phones and non-vegetarian food are reasons for a surge in rape cases, NDTV reports. "Many students misuse mobile phones by watching blue films and hearing obscene songs which pollute their mind," he said. On food, he reportedly said that non-vegetarian food "contributed to hot temper... and cited sermons of sants that pure vegetarian food kept the body and mind pure and healthy." (NDTV)

from Expert Zone:

Higher tax revenue from higher growth

(Any opinions expressed here are those of the author and not of Thomson Reuters)

The 2013-14 budget got completely out of hand because of a whopping shortfall in tax revenue. Development outlays had to be drastically cut to manage the fiscal deficit.

The key to the budget is revenue. The ratio of gross tax revenue to GDP reached a high of 11.9 percent when GDP growth was at its peak of more than 9 percent in 2007-08. Since then, both declined and the ratio has been in the narrow range of 10-10.7 percent. GDP growth is a painless way of raising revenue.

from Expert Zone:

Nehru’s last stand?

(This piece comes from Project Syndicate. The opinions expressed are the author's own)

The victory of the Bharatiya Janata Party and its leader, Narendra Modi, in India’s general election last month has raised a crucial question about the country’s future. With the BJP sweeping to power on a platform of aggressive nationalism and business-friendly corporatism, has the socioeconomic consensus dating to India’s first prime minister, the democratic socialist Jawaharlal Nehru, come to an end?

from Expert Zone:

Election 2014: Imbalanced participation of women

(Any opinions expressed here are those of the author and not of Thomson Reuters)

The marginalization of women in electoral politics is deeply embedded in the party system and the imbalanced gender power relations in the main political dispensations in India. They continue to be discriminated against not only in terms of seat allotments to contest elections but also within the rank and file of major political parties.

The reasons for women being on the fringes are varied but the focal factor that excludes them from the process is the patriarchal and male-dominant party competition structure that continues to exist in the Indian subcontinent. This not only dissuades females from electoral politics but also acts as a barrier in their quest to share political power.

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