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Straight from the Specialists

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.

In meetings with foreign leaders and institutional investors, Chidambaram spread the gospel that his government is serious about restraining the budget deficit and getting back on track with India’s planned fiscal consolidation. To attack the fiscal deficit, diesel subsidies are being curtailed and passenger ticket prices for trains are being increased.

Chidambaram’s road show may have raised expectations in the investment community with regard to what this year’s budget will contain. The majority of foreign fund managers, however, unlike local residents, normally have fairly low expectations of, and limited interest in, India’s annual budget exercise. With its perennial disappointments in budgetary control, poor implementation record and frequent bias towards populist measures, the Indian budget normally plays very little part in the strategic decisions of foreign fund managers to increase their exposure in India.

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.

India Markets Weekahead: New highs will be more robust

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

By Ambareesh Baliga

With consensus building for the Nifty to cross 6,100 and move into a new range, buoyed by the better-than-expected results for Reliance Industries, we saw the markets correcting with mid-caps and small-caps cracking. The markets recovered on Friday to close the week with marginal gains at 6,074.

from Davos Notebook:

Where emerging markets are headed next

In its video presentation "Looking to 2060: A Global Vision of Long-term Growth," the Organization for Economic Cooperation and Development predicts that China will soon surpass the United States to become the world's largest economy, and will account for 28 percent of global gross domestic product by 2030. The OECD also predicts that by 2060 the combined GDP of China and India will overtake that of the OECD economies. Meanwhile, Bain estimates that by 2020 emerging economies will account for two-thirds of global economic growth.

Without doubt, emerging countries are showing more resilience and promise than established economies in the Americas and the euro zone.

Taking the Indian economy to a higher orbit

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

Space research in India has come of age in the last five decades and the country is now in the elite club of countries capable of launching satellites for commercial purposes. What made this possible? An environment made conducive by government policy, objectives clearly spelled out, availability of funds, a homegrown talent pool and international tech support. Can a similar strategy work to take the Indian economy and the capital market to stratospheric levels?

Parallel between cash transfer schemes and health insurance claims

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

The more I think about it, the more I am convinced that the direct cash transfer scheme is a money saver for the government and the taxpayer. A direct parallel is the way insurance companies handle claims in health insurance plans.

India Markets Weekahead – Still time to tank up for a pre-budget rally

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

The Nifty has crossed 6,000 levels while the Sensex breached the psychological barrier of 20,000 to touch a two-year high — triggered by an overdrive of government action, encouraging macro numbers, corporate results and no bad news internationally.

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