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A blueprint for the future An eco-friendly commute in Mysuru Weaving wealth of western Tamil Nadu Need for radical RBI reform Sowing seeds of hope An eventful week with VVIPs of Delhi Why (not) abolish? Miles to go... You too T M Krishna? Welcome move to widen the tax net… Strategic planning the missing link Wanted: decentralised financial system The Great Fall Truce at Kasturi Buildings Babes In the wood-RBI North block has little clue to curb inflation How will it PAN OUT Outward ho Tryst with GST Land, land everywhere, but... Industry can’t get it from Mars, yet Technology and economic development should be linked A gratifying record Much ado about nothing Sardar Sarovar – the seventy year itch Pool energy prices Deming awardees galore! TN - so much to offer... Reform this licence to…kill Low profile moves Why throw baby with bath water? They add lustre to Padma Awards The deluge and the several kindly souls Welcome rains for damaged roads... A historic indirect tax reform Need plan over the long term planning CSR, tech revolution and bank crisis Economy through the month A tale of two Bihar babus Breaking news or breaking credibility? Policy Makers No groundnuts in groundnut oil! MS Installed Oh my GOLD Little surplus after salaries, subsidies and debt servicing Ganesh’s mantras Skewed Economic Zones? Jobs - Lost, Changed or Gained Much can be done by us Chennai Airport-Ready for a rapid take off... Cleansing Indian retail South India’s 100 most valuable companies Focus on agriculture and human resources Indian GST – Between extremes… Research for survival... A Fine division of responsibilities Well-administered State In the horns of a dilemma A dual GST that will protect prosperous states Sustainably developing manufacturing sector… Kudos to GIM organisers... PC please be our Santa Babes In the wood-RBI North block has little clue to curb inflation Tax evaders’ get out of Jail-Free Card It’s raining funds for states. Really? Focus on southern TN... 1800 parties registered with EC – Less than 60 contest elections Welcome Measures. Work for 10X Change INDIA keeps its date with destiny Two welcome measures from the chief minister... What the big B should offer? BJP can now hasten its thrust for reforms Rail-road Rajaraman Better relations with UK... When the examiner cheated... Make way for Make in India... If not Tamil Nadu, where else? Public investments and welfare will surge Trail-blazing Tamil Nadu After all, customer is the king Star of the South Healthy finances of the Chennai Corporation CAD and the emergency thereof
 
What the big B should offer?
The Indian economy is at the crossroads. It is awaiting tough fiscal policy response from the finance minister, which would be painful in the short-term, but would invoke the confidence of all stakeholders in the future of Indian economy.
FINANCE MINISTER CHIDAMBARAM is being overwhelmed with multiple challenges as he gets ready to formulate Budget 2013-14 – reviving growth, containing inflation, reducing trade gap and current account deficit, removing stumbling blocks in infrastructure development, rejuvenating investment outlook, targeting poverty reduction, covering deficits in social sector performance, strengthening financial sector and what not. To cap it all there is a threat of downgrading from the international credit rating agencies.   

Of course, such challenges tend to become ritualistic in nature, especially there have been when two or three crucial years of policy paralysis; and also in the wake of persistent hostile global economic environment. Perhaps never before was there such a constellation of formidable issues.

Effectively, Budget 2013-14 happens to be the chance for the UPA II government before the next general election in early 2014. It has an uphill task to prove its commitment to the implementation of pending reforms agenda; revitalise ‘animal spirit’ of investors; and ‘go for growth.’ Or in the usual quest for populism around this time, there would be the temptation to indulge in aggressive ‘social-welfare’ spending. In the long run such a strategy would be unsustainable and there would not be any political dividend to reap.

On the contrary, it is high time for the UPA II government to unveil its political maturity and sagacity through bold policy reforms. It is time to bite the bullet and administer the needed ‘bitter medicine.’ That’s the only way to restore the confidence of stakeholders in the future of our economy. 

Here’s my wish list.

First, putting the fiscal house in order. There can be no further fiscal drift. The likely revised estimate of fiscal deficit to GDP ratio of 5.5 per cent in 2012-13 needs to be reduced to 4.5 per cent or even lower in 2013-14, and to 3 per cent thereafter by 2015-16. There must be a visible action plan. There is the need for a regular tracking of this target with month-on-month performance review of key budgetary data. It is also necessary to formulate monthly cash-flow system of budgetary accounting under major heads of receipts and expenditure.

All such information must also be made available in the public domain. Such rigorous scrutiny would send right signals, including to the RBI to move quickly towards softening of interest rates policy; and also avert the prospects of downgrading of country’s credit.
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