Positive budget, says foreign investors – April 20th, 2015
Mr Gurdip Singh
Foreign investors have welcomed the Indian budget for 2015-16 as positive which sets a direction for economic and national development plans in the country.
It is a realistic budget, said the investors.
Though some people had held higher expectations from Finance Minister Arun Jaitley’s presentation of the budget in parliament, investors feel it is for managing the economic and political requirements of the country.
Investors see India as a major investment destination, a mega consumer market for their products and a wide range of opportunities for exports from the country.
“Very few Indian budgets in recent years have been presented in a more favourable backdrop than the budget presented by Finance Minister Arun Jaitley on 28 February 2015,” said Dr Amintendu Palit, a Senior Research Fellow and Research Lead at the Institute of South Asian Studies (ISAS).
The Economic Survey, presented a day before the budget, forecast-ed an economic growth of more than 8 per cent in the next financial year. It also emphasized that the country was set for ‘big bang’ reforms, he pointed out.
The Finance Minister would have been aware of the tremendous expectations from the Prime Minister Narendra Modi government’s first full budget, he said.
Among the main gains for visitors to India is the visa on arrival program which has been increased to cover 150 countries from the previous 43, a huge step forward for tourism in India.
“This is a huge plus for hospitality real estate and will also significantly amplify destination retail in the country,” said Anuj Puri, Chairman & Country Head, JLL India.
The government will allow foreign investment in Alternative Investment Funds (AIFs), a category of pooled-in investment vehicles for real estate, private equity and hedge funds. AIFs are funds established or incorporated in India for the purpose of pooling in capital from Indian investors for investing as per a pre-decided policy.
Economy
The Indian economy will continue to be on a high-growth trajectory this year, following on a path of recovery since 2014, said a senior economist with a London-based consultancy CRU.
Fundamentals of Indian economy are recovering due to the continued improvement in India’s fiscal and current account balances, Grant Hixon said.
“Given the market imbalances, softer commodity prices, in particular food and oil are expected to remain lower for even a longer period. This will help to contain inflation and result in higher disposable income for households, thus raising private consumption,” he said in a report on the Indian economic.
Lower prices should provide room for a more liberal monetary policy.
The rupee should continue to gradually depreciate against the US dollar. It is forecast that the currency will fall to around Rs 62-63 by the end of this year against the greenback, which will boost competitiveness. It will translate into stronger growth in exports this year.
Singh is the publisher/editor of Foreign Investors on India (fii-news.com), a bi-monthly on Indian economy with a website.