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Straight from the Specialists

Budget 2013: Getting the wow factor back

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

Gone are the days when Indians used to wait for the budget in February to buy new things. In the 1990s, capital market investors also waited with bated breath for the annual budget to spell out tax and policy measures that affected the fortunes of sectors and companies.

But over the years, the budget lost its wow factor, becoming more of a ritual presentation of the government’s finances, resource allocation, fundraising and spending. This is because most taxes have been rationalized (although some scope still exists) by successive governments and different ministries announce various policy measures throughout the year.

This time around, Budget 2013 is generating a lot of interest. It will be viewed closely by global rating agencies, international investors, the general public and the corporate world.

The finance minister’s compulsion is quite palpable. On one hand, P. Chidambaram needs to keep voters happy ahead of elections due in 2014, and on the other he needs to address the twin deficits — fiscal and current account.

Budget 2013: Need to review tax incentives

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

It’s going to be a tight budget this year and Finance Minister P. Chidambaram will be looking to save every rupee in revenue to reduce the budget deficit, to which he has committed. One option would be to withdraw tax incentives which have outlived their purpose.

The finance ministry is only too aware of revenue lost from tax incentives. In 2011/12, it was a loss of 5.29 trillion rupees. If tax incentives are withdrawn, the 2013/14 budget would be in surplus. Nothing would amuse the finance minister more.

What we want to see in Budget 2013

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

Over 15 years have passed since P. Chidambaram presented what was called the ‘dream budget’. It was a budget that changed the discourse of financial policy and offered a vision of India matching the growth and dynamism of the tiger economies of Southeast Asia.

In the last full budget of his government’s term, the finance minister once again has a chance to alter the discourse of policy away from handouts and towards efficiency. Our advice to him is to be as bold in ideas as his conviction permits and as ruthless in execution as the law allows. A few ideas for him to chew on:

Budget 2013: Focusing on growth Chidambaram’s only hope

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

When P. Chidambaram entered the corridors of  North Block in August last year after his appointment as India’s finance minister for the third time, he had his work cut out.

India was facing fiscal and current account deficits, an infrastructure bottleneck, high inflation, slowing growth and an increasing subsidy burden. Adding to the country’s woes was the threat of a rating downgrade.

India Markets Weekahead – Opportunity for those who missed out rally

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

It was a second straight week of losses of 1.59 percent with the Nifty closing at 5,903. As discussed in this column a fortnight back, we are in a phase which would tire out the participants and change the mood to a negative consensus on the street.

Budget 2013: A chance to leave ‘policy paralysis’ behind

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

In India, the government continues to both talk a good game and walk a decent game, having apparently learnt its lesson after a prolonged period of policy paralysis, before gaining a fresh lease of life with last summer’s economic reforms.

This year also, the government of Manmohan Singh has been unusually active ahead of the budget, scheduled for Feb. 28. Finance Minister P. Chidambaram has just completed a global road show.

Budget 2013: High on expectations again

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

It’s budget time in India once again, the annual month of anxiety and expectations that everyone awaits with bated breath.

Budget 2013 will be especially important on two counts. Coming as it does ahead of crucial state elections, the Feb. 28 budget could be outrageously populist. But with the government not really following through on its policy reforms in recent months, the question is how intent can translate to concrete action. Tough decisions are needed with a greater focus on growth.

Budget 2013 wishlist: What the IT industry wants

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

This has been one of the most challenging years for the IT and business process outsourcing (BPO) industry in India with global economic uncertainty affecting revenue growth.

The world is facing a “balance sheet recession” resulting in slower growth and greater volatility. While we have seen some stability in developed economies in the recent past, the worst is far from over for the industry.

Budget 2013 wishlist: IT industry expects policy changes

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

Despite volatility in the global economy, the Indian IT and business process management (BPM) industry has grown steadily and is set to cross the $100 billion milestone according to the National Association of Software and Services Companies (NASSCOM).

From a modest 1.2 percent in FY1998, the sector’s revenues now contribute around 7.5 percent of the country’s GDP. The industry provides direct employment to about 2.8 million Indians and indirectly employs 8.9 million people.

Budget 2013 should trim expenditure

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

Finance Minister P. Chidambaram is only too aware of the damage done by the last budget and has to an extent repaired it to unleash investment. The next budget should confirm his commitment to growth.

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