NEW DELHI: The Union
Budget for 2013-14, scheduled for February 28, is the next important event being eyed by the markets, investors and rating agencies.
February 2013 happens to be month of OFS as the Government of India (GoI) has got to meet the disinvestment targets to reduce the fiscal deficit. After several reforms initiated last year, the government has partially deregulated diesel prices, which shall now be increased by 40-50 paisa per litre every month.
In advance estimates for 2012-13, the CSO has projected economic growth rate of 5 per cent, the lowest in the decade. In the previous fiscal, GDP grew by 6.2 per cent.
However, the finance ministry said CSO's advanced estimates have often been revised either upwards or downwards because it takes into account the data till November or December.
Rating agency Moody's expects India's GDP to grow to 6.2 per cent in 2013 before returning to trend around 7.2 per cent in 2014.
Though the government has set pace for the reform process, a forward movement on GST, introducing greater competition in the mining sector, strengthening framework and creating new avenues for infrastructure financing are some areas where the government should now focus on.
We have compiled views and recommendations from various CXOs for the upcoming Union Budget 2013:
D.R. Dogra, MD & CEO - CARE Ratings & Research
The Union Budget for 2013-14 would walk the tight balance between regaining fiscal discipline and making expenditure more effective given that economic growth may not be too buoyant to bring in additional tax revenue.
While some marginal benefits may be given to individual taxpayers given the prevalence of high inflation, focus would tend to be more on incentivizing infrastructure bonds through tax breaks.
On the expenditure side, hopefully we would get to see the government spend on infrastructure now that we have passed the hurdle of linking diesel prices to the market which will help in controlling the subsidy bill.
As this will be the last budget before the elections, there would be some affirmative steps in the areas of agriculture, warehousing, continuation of interest subvention and write-offs, SMEs etc. But, we may be assured that populism will not be at the expense of prudence.
D.K. Aggarwal, CMD at SMC Investments & Advisors Limited
All stakeholders are eyeing the government as to what can it do to revive the investment climate and growth that dipped to 5.4% in the first half of the current fiscal.
In my opinion the actions taken by the government so far are the steps in right direction as Indian economy is primarily suffering from uncertainty as regard to policy making and long-pending reforms.
With the change of guard in the finance ministry, we have seen a lot of activity -- long-pending reforms happening since September this year starting from FDI in retail, setting up of a Cabinet Committee for fast clearance of infra projects, etc.
The government, especially the Finance Minister, knows that it is not about the taxes that can revive growth, it is about creating conducive and workable environment that can stimulate growth and revive investment demand. In my opinion in this budget, the Finance Minister would try to address some key priorities:
1. Clear roadmap to FRBM i.e Fiscal Health 2. Address the problem of rising current account deficit. 3. Focus on demand driven growth recovery 4. Create conditions for revival of private investment 5. Address the bottlenecks in the way of infrastructure developments
Source : economictimes.indiatimes.com