The maiden budget from India’s new right-wing government has promised a return to high growth — but disappointed some who hoped Indian Prime Minister Narendra Modi might use his large mandate to implement radical change.
The Bharatiya Janata Party (BJP) government opted for small steps in last week’s budget, in what it called “the beginning of a journey” after winning in May the largest electoral majority in 30 years.
While some economists felt Indian Finance Minister Arun Jaitley should have been bolder, Deepak Lalwani, head of financial consultancy Lalcap, told reporters it was not “realistic to have ‘big bang’ reforms so quickly.”
Photo: AFP
Jaitley pledged faster economic growth, tighter fiscal discipline, greater openness to foreign investment and a revamp of infrastructure.
However, he left intact US$43 billion worth of anti-poverty subsidies — raising questions about how he would meet ambitious targets to cut government spending.
Jaitley’s predecessor, former Indian minister of finance P. Chidambaram, said acerbically that after criticizing the previous left-leaning government’s subsidies as “mindless populism,” the new man in the job did not touch them.
“Welcome to the real world,” Chidambaram said.
India’s hundreds of millions of poor are a vital vote source of votes, and the BJP and its allies have their eyes on this year’s state elections.
The party controls just eight of 29 local governments, and anti-populist moves could alienate voters.
Economists have long argued that India’s economic potential could only be unleashed if it curbed subsidies and ended suffocating regulation.
They also advocate relaxing rigid labor protection laws, and easing complex land acquisition laws to boost industry. The budget left all these issues off the agenda, although Jaitley said he hoped a long-awaited national goods and services tax aimed at increasing inter-state commerce would be ready by December.
Japanese brokerage Nomura called the failure to tackle subsidies a “disappointment.”
However, others said that rather than missing the reform boat, Jaitley is playing a longer game to build consensus in a fractious democracy of 1.25 billion people in which competing business, social and political interests abound.
“Mr Jaitley has presented an admirable budget and he’s extended hope of many more reforms,” Ajay Bodke, investment strategy head at brokerage Prabhudas Lilladher, told reporters.
Reducing subsidies at a time when farmers are struggling through a weak monsoon was not an option in this budget, Bodke said. The government already delivered some bitter pre-budget medicine in the form of a double-digit hike in rail fares.
“Nothing can be done overnight — things take time in India — but Mr Modi is a free-enterprise person, and so we could have a different India in five years,” said D.H. Pai Panandiker, who heads the Delhi-based RPG Goenka Foundation think tank.
Jaitley’s decision to stick to the last government’s goal of cutting the fiscal deficit to a seven-year low of 4.1 percent of GDP has raised eyebrows.
He plans to meet the target through higher tax revenues and quadrupling privatization proceeds, but change may not just come through budgetary measures, analysts say.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last