India’s SUV tax: missing the point?
Is that an SUV or not?
Last month, India’s finance minister Palaniappan Chidambaram upped the excise duty on sports utility vehicles (SUVs) from 27 per cent to 30 per cent in the Union Budget.
But now, India’s minister for heavy industries, Praful Patel, has written to the finance minister asking him to withdraw the tax hike, after the auto industry reported the worst monthly sales figures in a decade. Continue reading »
India equities: cheap enough to buy?
In the middle of January, India’s benchmark Sensex index touched the psychological 20,000 mark. It has since tumbled, closing at 19,271.35 on Wednesday dragged down by profit-taking, pessimism and a disappointing government budget. Continue reading »
Tata Motors cuts prices on weak sales
Falling sales, excess inventory at dealerships and an increase in taxes – India’s Tata Motors had to take action.
On Tuesday, India’s largest car producer slashed the price of its Manza models by up to almost Rs50,000 ($912), bringing the starting price for the range down to Rs599,500. Continue reading »
India’s budget: investors fall out of love with Chidambaram
Investors have a liking for Palaniappan Chidambaram, India’s finance minister, and his pro-investment reforms that have pulled India’s stockmarkets higher. But they didn’t much like the disappointing federal budget he laid out on Thursday for the year beginning in April.
The benchmark S&P Nifty Index closed down 1.8 per cent after his speech, while the Sensex was down 1.5 per cent. Continue reading »
Guest post: for India’s budget, expenditure control remains the key
By Siddhartha Sanyal of Barclays
The macroeconomic backdrop for India’s budget on Thursday remains challenging. In the past six months the government has made considerable progress to rein in the fiscal deficit – but, almost entirely by containing expenditure. Inflation has eased and there has been some progress on the legislative front.
However, on the other hand, recovery in growth remains elusive so far and the current account deficit is set to scale new highs in the current fiscal year. Although commentary from the major rating agencies has improved in recent months, India still remains on a negative watch list and that offers little headroom for Indian policy makers. Continue reading »
SAIL offer: running into headwinds
The cash-strapped Indian government’s plans to sell a chunk of the Steel Authority of India (SAIL) in the next few weeks as part of a fund-raising disposal of state-owned assets is running into headwinds.
The country’s biggest steelmaker, where New Delhi holds an 86-per-cent stake, on Tuesday posted disappointing quarterly results, increasing expectations that the government will have to offer the shares at a chunky discount – or delay the offering. Continue reading »
Oil India offer: a chance to buy?
Shares in Oil India dropped 1.4 per cent on Friday to Rs532.90, as the Indian government opened an offer for sale for 10 per cent of the state-run company. But with Delhi offering stock for as little as Rs510, many analysts see a buying opportunity – particularly if government plans for energy market reform accelerate. Continue reading »
Indian diesel: tax, subsidise, annoy
Even as overall Indian auto sales have suffered over the past year, diesel vehicles have been a rare bright spot. The reason? Because of politically-sensitive government subsidies, diesel costs roughly 40 per cent less than petrol.
In the year ending March 2012, diesel cars were up a whopping 35 per cent, compared to petrol cars falling 15 per cent. Overall car sales rose 2.2 per cent – a far cry from initial forecasts by the leading trade body of 16-18 per cent (which was revised to 0-2 per cent). So what to do? Tackle the price of diesel, or make diesel cars a bit more expensive? Continue reading »
Guest post: India’s budget gamble
By Anand Shanbhag of Avendus Securities
India’s budget proposals for the year beginning April 1 aim to strike a low-level equilibrium between cutting the country’s fiscal deficit and preserving relatively high economic growth, while facing political opposition. However, the budget contains very little that could pull India’s real GDP growth to the heady levels of 2004-08. Continue reading »
Budget: Santa Claus comes to town
Balanced. Modest. Disappointing. Thus was the gamut of reactions to India’s budget for the fiscal year beginning in April, which Pranab Mukherjee, finance minister, presented to parliament on Friday.
Granted, for a government weakened by a recent electoral thrashing and beholden to unpredictable coalition partners, “balanced” was probably about the best that it could hope for. But it is a far cry from what the Indian economy needs right now. Even though investors had set their sights fairly low, the Bombay stock market still lost 1.2 per cent. Continue reading »
India Budget: nightmare for Vodafone?
Into a budget generally described as “balanced” or “modest” (not the most ringing endorsement but more on that later) the Indian government seems to have slipped one bombshell: retrospective taxation of overseas transactions which involve assets primarily in India.
The measure is open to interpretation but to many analysts the underlying message was clear: “Vodafone – and others – we are coming to get you.” Continue reading »
Guest post: Why India needs an actionable budget
By Vikas Khemani of Edelweiss Financial Services
The Reserve Bank of India maintained the status quo on lending rates on Thursday, holding them at 8.5 per cent. While the country’s central bank has continued to highlight inflation risks, this time its concerns arise more from the supply-side: from rising crude prices and the crutch of government subsidies. Clearly, the RBI has acknowledged that demand-side pressures have receded and the ability of businesses to pass on higher input prices to consumers is now limited. Yet, when it comes to inflation, the RBI isn’t entirely out of the red zone. Continue reading »
Indian budget: it’s all about the deficit
It’s all about the deficit.
That’s the view among analysts ahead of Friday’s of India’s budget for the fiscal year ending in March 2013. The expectation is for a budget focused on fiscal consolidation after a 2011 that seemed focused on anything but.
Those expecting the government to announce major reforms in the budget itself may be disappointed – the most that can be hoped for is an indication that ministers will redouble their efforts on economic liberalisation without launching anything radical (New Delhi was burned recently by its experience of opening up FDI in retail). Continue reading »
India: outpacing China by 2013?
After months of bad news flow – high inflation! interest rate hikes! corruption! high petrol prices! weak currency! – India is finally getting some good news, even if it’s a good two years off.
In 2013, according to an Ernst & Young report released Monday, India will grow at 9.5 per cent, bouncing back from this year’s 7.2 per cent, and outpacing China’s projected 9.2 per cent. Continue reading »
India’s new health tax misses the point
India may have completed two decades of market-oriented economic liberalisation. But its’ deep-rooted socialist mindset – especially attitudes about the poor, and how they live, or should live – are hard to shake.
That is apparent in a particularly bizarre approach to a new service tax on health care in the budget unveiled by Pranab Mukherjee, the finance minister, on Monday. Continue reading »
| About this blog | Headlines email | Blog guide |
| Regulars | Series | Archive |
Older entries
Stefan Wagstyl
Rob Minto
Pan Kwan Yuk
Jonathan Wheatley
Heba Saleh