Straight from the Specialists
(Rajan Ghotgalkar is Managing Director of Principal Pnb Asset Management Company. The views expressed in this column are his own and do not represent those of either Principal Pnb or Reuters)
Rating agencies have left India’s sovereign rating unchanged after the 2013 Budget. A rating downgrade would mean India getting junk status which is certainly not something one would want when the current account deficit is widening.
Of course, despite our proud finance minister not admitting to letting rating agencies dictate his budget, I am relieved that the nearest and sweetest low-hanging fruit fell into his lap.
In the post-liberalisation years, I have often wondered about the diminishing relevance of the budget. India’s macro-economic challenges stem almost entirely from structural imbalances and none of these can be addressed in the budget, which is at best a summary of the fiscal impact of initiatives driven by numerous ministries. The poor finance minister bears the brunt of the limelight.