FINly | Finstreet’s Fortnightly Magazine K. J. Somaiya Institute of Management Studies and Research
18 Mar 2013
India’s growth in manufacturing
India is likely to become the fifthlargest manufacturing nation if it is able to increase the share of manufacturing in GDP to 25% as per a study by Boston Consultancy Group. The National Manufacturing Policy sees India's manufacturing sector to increase to 25% share of GDP from the current level of 15% by 2022. That will help India come in comparable terms with its global peers.
HEADLINES
Budget Proposals implementation to be fast tracked
Finance Minister , Palaniappan Chidambaram is fast pushing to prepare a road map to implement the Budget proposals. Key road maps being laid down include those for setting up a women’s bank by November (with six branches in six regions), coming out with safe harbor rules by April, bringing tax notifications by the end of this month and disinvestment of three public sector companies this month and one in April. Work on the Direct Taxes Code (DTC) Bill has been fast tracked to get it tabled in the current session of Parliament. The insurance and pension Bills would also be pushed for passage in this session of Parliament.
RBI likely to cut rates in mid quarter review The Reserve Bank of India is likely to cut key policy rates by 0.25% in its mid-quarter review on March 19. Global investment banking majors expect a rate cut by RBI owing to declining core inflation levels and sluggish growth trends. Global banking giants HSBC, Standard Chartered, Citigroup, Barclays and Credit Suisse expect RBI to slash the repo. The factors that are likely to act in favour of a slash in rate cuts include a lesser February trade deficit, a slowdown in GDP growth to decade-low levels, and a fall in core inflation to below 4% for the first time since April, 2010.
India – an attractive destination for M&A ?
Favorable demographics and growth opportunities are likely to make India an attractive destination for merger and acquisition activities. Some of the key sectors to aid this include consumer goods and pharmaceuticals. According to global consultancy Ernst & Young the country is becoming a more attractive destination with reforms coming through.
The insurance and pension Bills would also be pushed for passage in this session of Parliament. The finance minister aims to conclude negotiations on the Goods and Services Tax by MayJune. The finance ministry is also
considering rationalizing withholding tax for foreign investors in various instruments and doing away with sub-limits on investments. Sebi, along with the Insurance Regulatory and Development Authority and the Reserve Bank of India, would also take follow-up actions on the Budget announcements.
50K Cr projects to be cleared coming fiscal
Foreign investment in India would get a boost once the new Cabinet Committee on Investment (CCI) starts clearing projects to the tune of Rs 50,000 crore in the next fiscal year. The clearances will also give an impetus to the infrastructure projects. Department of Economic Affairs foresees many projects coming on stream in the next fiscal. CCI approvals would be for total investments of about Rs 50,000 crore by March end. The government has constituted a CCI, under Prime Minister Manmohan Singh, to accord fast track clearances to high-end projects for their time-bound implementation.