ECONOMIC REFORMS
FPIs invest Rs 32,365 cr in equities in July on continued policy reforms
Going forward, developments in the US economy and markets will set the trend for FPI in August, V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.
Framework to evaluate investment proposals, cut cost disadvantages for cos relocating to India: GTRI
India is falling behind countries like China and Brazil in attracting foreign direct investment (FDI). The Global Trade Research Initiative (GTRI) recommends reducing cost disadvantages for companies that are relocating to India, improving the Ease of Doing Business throughout the business lifecycle, and setting up a framework for evaluating investment proposals to boost investments.
Honey, I shrunk the factory: How regulation stifles India's output
A big barrier for factories, big and small, all over the country to achieve optimum output is building regulations that leave little space for core activities. Factories are left with little land for their operations after following different building regulations, a study has pointed out.
Will suggest correction of duty inversion in some electronics and leather goods: Rajesh Kumar Singh, DPIIT
DPIIT plans to address duty inversion in electronics and leather goods in the upcoming customs duty review and may crack down on tobacco firms' proxy ads. The department uses Quality Control Orders and import tariffs to encourage foreign investment.
ET Q&A: Reforms to allow development without taking land away, says Ajay Seth
Ajay Seth, Economic Affairs Secretary, highlighted that while employment is a central focus of the budget, it extends beyond that to include a comprehensive package of schemes aimed at enhancing job creation and quality. The budget also emphasizes a forthcoming economic policy framework to drive next-generation reforms, focusing on sustainable growth and job opportunities over the next decade.
Foreign investors may get a taste of ease of doing business
More parity between FDI and FPI likely; FEMA may see changes to boost investments in India, economic affairs secretary Ajay Seth told ET . Finance minister Nirmala Sitharaman highlighted in her budget speech the need to simplify FDI and overseas investment rules.
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Budget 2024: Government to formulate economic policy framework for next generation of reforms
Finance Minister Nirmala Sitharaman announced the government's plan to create an 'Economic Policy Framework' in the Budget Speech, focusing on facilitating employment opportunities and sustaining high growth. The framework aims to improve productivity of factors of production, incentivise reforms, promote competitive federalism, and collaborate with states for development. The Budget also emphasises nine priorities, including agriculture, employment, urban development, and innovation, for generating opportunities and driving economic growth.
Budget 2024: Govt to work with states on land, labour reforms, says FM Sitharaman
As part of the labour related reforms, Finance Minister Nirmala Sitharaman said a comprehensive integration of e-shram portal with other portals will facilitate such a one-stop solution to provide a wide array of services to labour, including those for employment and skilling.
Budget 2024: FM Sitharaman announces new economic policy framework to drive next-generation reforms
Budget 2024: Finance Minister Nirmala Sitharaman unveiled the government's plan to introduce an economic policy framework aimed at next-generation reforms to boost economic growth. The 2024-25 Budget includes support for Odisha's tourism sector and development of religious corridors. The Anusandhan National Research Fund will be operationalized to support research and innovation. Collaboration between the Centre and States will be essential to implement these reforms, covering land, labour, and capital.
CEA on Economic Survey 2024: Reforms at state, district levels need of the hour
India's growth remains resilient despite global uncertainties. Economic Survey 2024 highlights key areas for focus such as private capital, green growth, MSME support, agriculture potential, education focus, and state machinery revitalization.
Central Asia’s richest state poised for strong economic growth in 2024
Kazakhstan's GDP grew by 5.1% in 2023, with 2024 growth forecasted at 5.3%. Venture transactions exceeded $110 million. President Tokayev aims for 6–7% annual growth. A National Development Plan aligned with OECD standards seeks to make Kazakhstan a regional hub. Balanced economic reforms and transparency are highlighted. World Bank forecasts 4.5–5% GDP growth in 2025.
Economic Survey 2023-24 calls for a comprehensive framework for Care Economy
The Survey, tabled by the finance minister Nirmala Sitharaman in Parliament on Monday, proposed strategic reforms, including parental leave policies, subsidies for care services and encouraging public and private investments in building care infrastructure besides putting in place a rating system for creches and elderly homes to develop a structured care economy in the country.
Survey asks the government to address tax uncertainties, do away with licencing
The Economic Survey highlights the need for reducing compliance burden on businesses, simplifying tax regime, and eliminating licensing to attract investment. Small and medium enterprises are particularly affected by the heavy burden. India Inc expects tax reforms and reduced litigation from the upcoming budget.
What Budget 2024 can do to get foreign investors to bet on India
The Union Budget 2024-25 is anticipated to drive economic growth and attract foreign investment, focusing on easing business regulations, enhancing the Production Linked Incentive scheme, and implementing significant tax reforms. These measures aim to position India as a premier global investment destination and accelerate its journey towards a $5 trillion economy.
Top Chinese Communist Party body endorses comprehensive reforms to halt economic slowdown; highlights Xi Jinping's "core" leadership
China's Communist Party under President Xi Jinping's leadership adopts reforms aiming for socialist modernisation by 2035. Emphasis on building a high-standard socialist market economy and improving national security. Plans to strengthen military and enhance Party's leadership. Focus on economic growth and market efficiency.
Modi-led NDA govt should focus on raising farm productivity and improving supply chain: Ashima Goyal
Ashima Goyal emphasised that capacity needs to expand in health, education, environment, courts, policing as well as in infrastructure. "Rising agricultural productivity and strong supply chains are necessary to reduce volatility in food prices," she said, adding that many of these require good coordination with the states.
Expectation is that reforms will continue, but it may not be as simple as that: Ketan Dalal
"Let’s take a look at some key areas where reforms are needed, but could be impacted; a crucial area of reforms is that of land reforms, given the need to promote India as a manufacturing hub and to leverage the China + 1 opportunity."
CII wants Modi 3.0 govt to push land, labour, agri reforms to boost growth
Industry body CII on Thursday made a case for pushing reforms in sectors like land, labour, and agriculture by the Modi 3.0 government to accelerate economic growth, which is estimated to be around 8 per cent in the current financial year. CII President Sanjiv Puri said a lot of policy interventions in the past have put the economy on "a much stronger wicket".
Strategic reforms in customs duties, GST, commerce to push India's inclusive growth, says GTRI
The think tank suggested increasing the GST exemption limit for a firm's annual turnover from 40 lakh to 1.5 crore as this will be transformative for India's MSME sector, promoting job creation and growth. Firms with less than Rs 1.5 crore turnover make up over 80 per cent of registrations but contribute less than 7 per cent of the tax collected, it said adding a yearly turnover of 1.5 crore equals 12-13 lakh monthly turnover, translating to just Rs 1.2 lakh at a 10 per cent profit margin.
Economists expect big-bang reforms to continue under Modi 3.0
Modi is set to be sworn in for third term as India's Prime Minister in coalition government with key partners Telugu Desam Party and Janata Dal (United). Economists anticipate focus on economic reforms to achieve goal of Vikshit Bharat by 2047. Budget to prioritize infrastructure, manufacturing, and welfare schemes amid global economic challenges.
Modi 3.0: How different will be the third Modi government
Narendra Modi is scheduled to take take oath for the third term as India's Prime Minister in a changed political landscape. Allies demand concessions, potentially affecting economic agenda. Expectations for populist budget with focus on welfare and rural areas, though concerns raised over economic impact. Reform agenda may face challenges due to weakened mandate, but continuity likely in infrastructure investment and business environment improvements.
Lok Sabha results won't force India's budget to make significant policy shifts: Fitch
Fitch Ratings anticipates minimal policy shifts in India post-election losses. The upcoming July budget will detail economic reform plans and fiscal goals for the next five years, crucial for addressing fiscal metrics, reducing debt, potential deviations from capital expenditure commitments, the risk of heightened social spending, progress in judicial reforms at the state level, and reforms in the manufacturing sector.
Lok Sabha Results: Coalition govt is back. Will policy paralysis too strike again?
Over the past decade, Narendra Modi has propelled India's economy to become one of the fastest-growing globally, positioning it to soon rank as the world's third-largest. His emphasis on reforms and dynamic policies, exemplified by initiatives like Make in India, has bolstered manufacturing and infrastructure growth. However, the recent Lok Sabha election results, leading to a coalition government, raise concerns about potential challenges and policy paralysis ahead. Expert analyses suggest that while coalition governments have historically been effective in driving economic growth, they have struggled to control inflation.
Coalition politics, weakened mandate could make passing legislations on ambitious reforms challenging: Fitch
Fitch Ratings predicts that the new government in India, led by Narendra Modi, will face challenges in passing legislation on ambitious reforms due to coalition politics and a weakened mandate. Major reforms to land and labour laws will remain on the agenda, but these have been contentious and the NDA's weaker mandate could complicate their passage further. The BJP fell short of a single-party majority in the 543-seat lower house of parliament for the first time since its latest period in government in 2014.
Modi 3.0 has heavy lifting to do on tax reforms to managing stock risks
Economists outline key priorities for India's incoming government, emphasizing the need for growth, job creation, and macro stability. Pronab Sen highlights the importance of sustainable livelihoods, while Pranjul Bhandari suggests that 'easy' reforms could maintain 6.5% growth. However, achieving 70 million jobs requires politically sensitive reforms in agriculture, labor, and land. Additional recommendations include infrastructure investment, judicial reforms, enhancing export competitiveness, and further tax reforms, particularly bringing petroleum and power under GST.
Expect broad policy continuity with focus on capex: Ratings agencies
Economists emphasize the new Indian government's need to focus on growth, job creation, fiscal stability, tax reforms, and risk management. Reforms in land, labor, and capital markets are crucial, along with fiscal consolidation and increased government spending to attract private investments. They suggest balancing pro-consumer policies in agriculture and tackling judicial delays. These efforts aim to sustainably boost job creation and income levels, with the potential to raise India's economic growth to 7.5-8% over the medium-to-long term.
Brute majority or coalition pressure, India's growth to be perpetual theme
India's growth story may thrive under a coalition rule despite no party having an absolute majority. Past data suggests coalition governments have effectively boosted growth but struggled with inflation. Inflation rates varied under different regimes, with Narendra Modi's government seeing 5.4% inflation during its tenures.
Modi retaining power under changed circumstances to make reforms challenging: Economists
Economists warn that PM Narendra Modi's retention in power after the general elections under 'changed circumstances' will pose challenges for implementing critical reforms.
New govt to inherit strong economy, focus on making India developed nation by 2047
India's record-breaking economic growth rate and strong tax revenues provide a foundation for future reforms aimed at transforming the country into a developed nation by 2047. The new government must address challenges such as unemployment and rural distress, while also focusing on controlling inflation. Despite potential obstacles, experts expect continued infrastructure-led growth, investor-friendly policies, and reforms to maintain India's economic momentum and attract investment.
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