With headline inflation under check, comfortable projections around fiscal and current account deficit, strong FDI, bumper harvest, comfortable forex reserves, stable rupee and a consistent monetary policy, the markets should take this announcement as a positive.
Reserve Bank of India governor Shaktikanta Das expects India to get more overseas inflows and the current account deficit to ease hereon. “The CAD is expected to moderate in the second half of FY23 and remain eminently manageable and within the parameters of viability,” Das in his monetary policy statement.
FY24 Budget intends to fortify India as a key investment destination. It is a budget with an eye on long-term growth with stability, with a roadmap for sound fiscal management and good governance.
GoI's enthusiastic support to domestic demand is reasonable, as domestic consumption has hitherto constituted nearly 55% of GDP, recording an average growth rate of 7% the last decade. The critical fiscal support provided in the budget to agriculture, the rural economy, and domestic tourism, coupled with lowering of the net income tax burden, will boost domestic demand.
The survey added that while traditional infrastructure sectors such as roads and railways have received a renewed push in recent years, sectors such as inland water transport and civil aviation, which have significant untapped potential, are also being encouraged sufficiently.
The focus on direct taxes will be on encouraging greater compliance through simplification and rationalisation of the law, more effective dispute resolution and measures that contribute to building an environment of trust between the taxpayer and the tax administration. An announcement on the implementation of the Pillar 2 global minimum tax should also be coming, he said.
"A rebound in FDI inflows is, however, expected as the Indian economy sustains its high growth while monetary tightening the world over eventually eases with the weakening of inflationary pressures," the survey said.
In 2020, the government realised the lacunas of the previous initiatives, came back to the drawing board alongside the ministries and drafted the Production
He said the industry should nevertheless have this conversation with the policy makers on allowing 100 per cent FDI. According to him, one of the challenges for the global insurers is to find a suitable local partner. "With over 60 insurers between life and general insurance and a large number of them joint ventures, there is really an acute shortage of local partners, who either have the ability or the inclination to get into this space," Rau said.
The World Bank's revision of Indian GDP growth projections from 6.4 per cent to 6.9 per cent in the current fiscal year is one among the many affirmations Indian policies and reforms have received in recent times.
Commodity fluctuations and increase in prices of key inputs continue to dampen private consumption with exports and domestic demand slightly muted. Given this unprecedented scenario, it is essential and natural that Budget 2023 continues efforts to increase potential output and revive demand.
Infrastructure-building has been a prominent feature in the last few budgets, with the PM Gati Shakti National Master Plan being the most ambitious among other initiatives.
ASICS Corp entered India in 2015 through its subsidiary ASICS India and currently manufactures about 22% of its products in India. Under the foreign direct investment (FDI) guidelines, it cannot open company-owned stores till it manufactures 30% of the products in India.
The CBI on Thursday conducted searches at the premises of Mayaram after filing an FIR against him and a UK-based company for alleged corruption in the supply of exclusive colour shift security thread for Indian bank notes, officials said. The CBI, in its FIR, alleged that Mayaram, the UK-based company De La Rue International Ltd and unidentified officials of the finance ministry and RBI hatched a criminal conspiracy to extend undue favour to the firm.
Joint Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Manmeet K Nanda said that usually investments and equity inflows improve towards the last quarter of a financial year.
The ministry of information and broadcasting (MIB) is the nodal ministry for the formulation of FDI policies in the broadcasting, film, print and advertising sectors. FDI in both film and advertising sectors is permissible up to 100% on the automatic route without any other conditions. The FDI limit in print media and digital news has been capped at 26%. The FDI limit in TV news and FM radio has been kept at 49%. The FDI in cable, DTH, and entertainment broadcasting is 100%.
In order to make India a credible alternative to China, Rajan thinks that India needs to stop raising tariffs as they are deterrents to firms looking to relocate to India. Rajan claimed that while India is a country that companies are looking at, it is not the number one option as companies would rather opt for countries like Vietnam where policies are a little more certain and less volatile.
Jaishankar who is on a three-day visit to Cyprus, while addressing the business event said India and Cyprus last year had bilateral trade of about USD 214 million and were confident to reach the last year's figure much earlier this year.
Steps to promote ease of doing business, skilled manpower, presence of natural resources, liberal FDI policies, huge domestic market and prospects of healthy growth are the reasons for optimism on the foreign inflows front for India in 2023 but issues such as delay in enforcement of contracts, cumbersome procedures and high interest rates are still sore points.
"Government has reviewed the Foreign Direct Investment (FDI) policy in the coal mining....allowing 100 per cent FDI under automatic route for sale of coal, coal mining activities including associated processing infrastructure subject to the provisions of the Coal Mines (Special Provisions) Act, 2015 and Mines and Mineral (Development & Regulation) Act, 1957," Coal Minister Pralhad Joshi said in Rajya Sabha.
Fitch Ratings not only acknowledged that risks to Asia's third-largest economy's sovereign rating from external pressures is limited, but it is also of the opinion that India's forex reserves will remain robust and current account deficit will be contained at a sustainable level.
In a letter to Department for Promotion of Industry and Internal Trade (DPIIT) Secretary Anurag Jain, the chamber said the loopholes in the current policy are being exploited by online retailers to carry out inventory-based e- commerce/multi-brand retail trade in the garb of running marketplace platforms.
In 2020, the government announced increasing the foreign direct investment (FDI) limit from 49 per cent to 74 per cent under the automatic route and up to 100 per cent through the government route in the defence sector.
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