Straight from the Specialists
(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.
The budget has assumed a nominal GDP growth of 13.5 percent (the economic survey pegged real GDP growth in the range of 6.1 to 6.7 percent). It has projected a fiscal deficit of 4.8 percent for FY14 and estimated the current year fiscal deficit at 5.2 percent. The revenue deficit has been forecast at 3.3 percent of GDP.
Corporate tax collections are budgeted to increase by 17 percent; excise to grow by 18 percent, driven by rationalization of rates to converge to a peak rate of 12 percent; and service tax collections to grow 36 percent — with the help of an amnesty scheme.
(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.
(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?