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P Chidambaram's first budget in his third stint at the finance ministry will go the extra mile to avoid proposals that could run afoul of investors, while keeping a firm focus on economic revival, fiscal consolidation and boosting India's allure as an attractive investment destination. Early indications of the budget's character gleaned from discussions with finance ministry officials reveal 'clarity' and 'stability' as the buzzwords shaping the exercise, along with a keenness to avoid steps that could unnerve investors and undermine an improving yet fragile sentiment in the country. "The idea is to avoid surprises as they tend to unnerve investors, so stability will be key," a senior government official told ET
FDI flows contracted 27% year-on-year between April and October last year to $14.78 b. Portfolio investment flows are up, but with international ratings agencies ready to cut their sovereign rating for India should matters get any worse, these could reverse in no time. Little wonder, experts are urging caution against any move that could hurt sentiment. "There should be nothing to spook the investment sentiment...It is imperative that the government the chooses the right priority," said Abheek Barua, chief economist at HDFC Bank.