Expert Zone

Straight from the Specialists

Budget 2014/15 reveals priorities, sets the stage

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

The new Narendra Modi government rides on a long wishlist of policies and reforms, with limited resources. Budget 2014/15, as expected, reveals the government’s priorities in the near and medium term.

Arun Jaitley poses as he leaves his office to present the union budget for the 2014/15 fiscal year in New DelhiThe inflation moderation imperative overshadows near-term headline growth desires, manifested in aggressive (albeit challenging) fiscal deficit targets. The projected fiscal deficit of 4.1 percent (3.6 percent of GDP in FY16) versus the 4.6 percent recorded in FY14, is in line with expectations. The reduction in the budget deficit is driven by hoped-for revenue growth rather than depressed spending growth.

The spending mix is forecast to improve towards more plan and capital spending, which should bode well for the growth outlook. Curtailed non-plan spending growth and subsidies are also a positive.

This budget sets the stage for a future pick-up in growth, rather than drive acceleration in real GDP this year. It does outline both policy initiatives as well as specific schemes (albeit with yet limited fund allocation) to support medium-term growth recovery.

Time for a relook at FDI in insurance intermediaries

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

Insurance companies in India have an FDI limit of 26 percent, which may be revised upwards in the coming months. The industry requires funds to grow and the revision can be an enabler, but the process may take some time as it requires legislative approval and there seems to be some opposition to the move.

Since the industry is still in its nascent stage, the insurance regulator also places the same FDI cap on insurance intermediaries such as brokers and web aggregators, severely limiting their ability to raise funds to grow their business.

How to rescue the falling rupee

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

I can’t predict where the rupee will eventually land and I don’t think anyone else can either.

Of course, we are not the only country at the mercy of the dollar because almost every emerging market is suffering. But surely, that shouldn’t be any consolation.

Indian telecoms at the crossroads again

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

In the 18 years I have been working with Indian telecoms operators, I can recall several points where I felt the industry was at a crossroads in its evolution.

Yet another infructuous parliament session?

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(The views expressed in this column are the author’s own and do not represent those of Thomson Reuters)

The last session of parliament was a washout. The present one looks to be no different going by its chaotic start.

FDI in insurance — to hike or not to hike?

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

FDI in insurance might just be increased to 49 pct. This sounds way too familiar and has been the situation for quite a long time now. Or we could do some scenario building and even see it being delayed by a few more years.

Foreign borrowing or foreign investment?

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

The market’s response to the currency measures announced on Monday was a dip in the Sensex. Much was expected after the announcement made over the weekend by the finance minister. What has been actually initiated cannot make much difference either to the rupee or to growth.

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