Don't take my subsidy away
Struggling to bring down its fiscal deficit, India wants to stop allowing commercial ventures like movie theatres, swish office complexes, and hotels from using highly-subsidised diesel fuel to run-back up generators when the power goes out. It is also trying to wean factories, mobile phone towers, and state-run bus companies from highly subsidised fuel.
But New Delhi has discovered that a partial-phase out of subsidies – particularly targeting affluent and resourceful entrepreneurs – is more difficult than it looks. Continue reading »
Any legislation on land acquisition involves a careful balancing act, protecting landowners while encouraging development. It is an important and sensitive issue in any emerging nation.
So it is perhaps not surprising that India’s Land Acquisition, Rehabilitation and Resettlement Bill, 2011 (LARR) has faced repeated delays. Once again, an all-party meeting to discuss the bill last Thursday failed to reach consensus and another is set for March 20. Continue reading »
How do you get Reliance’s Mukesh Ambani, Rahul Bajaj of Bajaj Auto (both pictured left) and Infosys’ Kris Gopalakrishnan on the same team?
The answer, it seems, is to bring a little Washington to Delhi. The Brookings Institution, a highly-regarded think-tank, is opening an Indian affiliate, and many of India’s big names have signed up. Continue reading »
Indian retail reform finally secured parliamentary approval on Friday, with the upper house following the lower house in backing the move, which will allow foreign supermarkets into the country.
It should bode well for other imminent reforms, including insurance and pension fund liberalisation. But Prime Minister Manmohan Singh won approval only with the support of two regional parties outside his fragile coalition. As so often in India’s democracy, securing support for controversial changes requires luck and political cunning. It will be the same with future reforms. Continue reading »
The bulls now driving the Indian stock market on Thursday seized on another piece of good economic news – and pushed stocks to a new two-year peak and the rupee to its highest for a month.
Investors welcomed the vote in the lower house of parliament to approve retail reform and reports that the ruling Congress party would secure a majority to get the measure through the upper house.
Never mind that parliamentary approval isn’t strictly necessary or that the actual decisions on retail liberalisation have been devolved to the states – or that it will take years for foreign retailers to roll out stores and make a difference to the economy. The important point is that there is once again a bit of hope about investing in India. Continue reading »
It all sounds fine enough, but can he deliver? This is likely the question most Indian analysts will be mulling this week, following an intriguing speech from Prime Minister Manmohan Singh over the weekend, in which he pledged to double down on his recent plethora of reforms — giving the first outline of what amounts to a second wave of new economic measures.
Continue reading »
A last minute effort by the finance minister to convince the Reserve Bank of India to cut interest rates failed to bear fruit on Tuesday as the central bank held rates at 8 per cent.
P Chidambaram had said on Monday that the government would effectively halve the fiscal deficit by 2017, adding pressure on the bank to ease. Instead, the RBI cut the cash reserve ratio for banks by 25bps to 4.25 per cent. Continue reading »
Ah, to be a Gandhi in Delhi. Even if you don’t go into the family business of running the country, you can plough your own furrow and do quite nicely for yourself.
Just ask Robert Vadra, pictured left with his wife Priyanka Gandhi, whose mother is Sonia Gandhi, head of the Congress Party. His personal wealth has multiplied rapidly in a few short years. But now his good fortune is at risk of getting caught up in property scandal. Continue reading »
India’s Congress-led government has been deeply divided within itself over how to overhaul the country’s antiquated land acquisition laws to overcome what is now one of the biggest bottlenecks for the country’s economy – the difficulties acquiring land for infrastructure and large-scale industrial projects.
The Congress has been trying to balance industry’s desire for a more efficient, effective process, with the rights and interests of farmers, who will lose their land to make way for industrial development. Continue reading »
When is $135,000 a “very small amount”? When you are an Indian politician, apparently.
That was the message from India’s steel minister, Beni Prasad Verma (left), who on Monday defended Salman Kurshid, law minister, from allegations that he and his wife had bilked a charity for the poor and disabled they had founded out of nearly $135,000.
Kurshid denies the allegations. Continue reading »
The Indian government seems to be standing firm on its new reform agenda, despite a wave a protests and the loss of a coalition partner that would have lost the Congress Party its majority.
On Friday – the day after opposition leaders took to the streets to protest a hike in diesel prices and the opening up of multi-brand retail to foreign direct investment – the government gave Indian companies some comfort in the form of a tax break. Continue reading »
Shares in India’s Sesa Goa and Sterlite Industries – which are set to be merged by parent company Vedanta – fell more than 5 per cent in early trading Tuesday after the Goan state government announced a temporary suspension of all mining late on Monday.
The move came just days after a judiciary commission exposed an illegal mining scam scam involving “serious illegalities” in the award of licences, the latest in a long line of mining scandals to have rocked the country. Continue reading »
India’s parliament wrapped up yet another session on Friday without having passed a single significant bill, mired in protests over the latest in a seemingly never-ending series of government corruption scandals, even as the country’s economic picture deteriorates ever further.
The government also ruled out any immediate cuts in diesel subsidies, backtracking on hints earlier in the week that it might press ahead with the controversial and much-discussed proposal. Continue reading »
By Akshay Mathur of Gateway House
It’s not easy to defend India’s democratic structure and economic policy-making these days. The latest gridlock in parliament over the national auditor’s estimation of a potential loss of $33bn in revenue associated with coal blocks allocation is only the latest indictment of the country’s leadership. Continue reading »