News / Asia

India Growth Plan: Trim Fiscal Deficit, Woo Foreign Investors

Indian Finance Minister Palaniappan Chidambaram, center, arrives at Parliament to present the annual budget in New Delhi, February 28, 2013.
Indian Finance Minister Palaniappan Chidambaram, center, arrives at Parliament to present the annual budget in New Delhi, February 28, 2013.
Anjana Pasricha
India’s finance minister is pledging to revive economic growth by trimming the country’s fiscal deficit. He also says India is in critical need of foreign investment to reverse the worst slowdown in a decade for Asia’s third largest economy.  

Speaking to parliament during the presentation of the country's annual budget, Finance Minister P. Chidambaram vowed to cut India’s fiscal deficit to 4.8 per cent in the next fiscal year.  He said the country needs to make tough spending decisions.

"I have no choice but to rationalize expenditure. We took a dose of bitter medicine. It seems to be working," he said.

India’s fiscal and current deficits have raised concern of a downgrade by rating agencies.   

However, government spending will rise by about 16 per cent in the next year. To meet those expenses, the Finance Minister announced a temporary tax on the super rich - those with an annual income of about $200,000 - and on local companies with an income of over $2 million.

Minister Chidambaram acknowledged that the Indian economy, which has slowed to a decade-low of about five percent, is in a trough. He says restoring high growth is a challenge, but that he is optimistic about the future.  

"There is no reason for gloom or pessimism," he said. "Even now, of the large countries of the world, only China and Indonesia are growing faster than India in 2012-13. And in 2013-14, if we grow at the rate projected by many forecasters, only China will grow faster than India.”

The government estimates that India’s economy will grow by over six percent in the next fiscal year, after slipping to five percent in the last year.

Chidambaram focused on winning back foreign investors assuring them that India will be business friendly.

He pointed out that India needs $75 billion to finance its current account deficit, or trade imbalance, which has grown rapidly due to massive imports of oil, gold and coal.
 
"I have been at pains to state over and over again that India does not have the choice between welcoming and spurning foreign investment. Foreign investment is an imperative," he said.

Foreign investment fell last year as investors were alienated by a series of unexpected tax proposals, by corruption scandals and India’s tough regulatory regime. Opposition parties have also opposed the government’s decision to open the retail sector to foreign supermarkets.

Prime Minister Manmohan Singh expressed hope that the measures announced will revive the economy and that India will return to growth levels of about eight percent in two to three years.

Forecasters say returning India to those levels of growth will depend on the government’s willingness to reduce spending, initiate reforms and control inflation.

You May Like

US Storm Falls Short of Severe Predictions, Yet Affects Millions

NYC mayor says, 'This is nothing like we feared it would be,' yet blizzard warnings, travel bans remain for several East Coast states More

Millions of Displaced Nigerians Struggle with Daily Existence

Government acknowledges over a million people were displaced in 2014 due to fight against Boko Haram insurgency More

Facebook: Internal Error to Blame for Outages

Temporary outage appeared to spill over and temporarily slow or block traffic to other major Internet sites More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Obama Urges Closer Economic Ties During Historic India Visiti
X
Aru Pande
January 26, 2015 9:33 PM
U.S. President Barack Obama says the United States and India must do better to capitalize on untapped potential in their economic relationship - by removing some of the roadblocks to greater trade and investment. As VOA correspondent Aru Pande reports from New Delhi, Obama spoke after participating in India’s Republic Day celebration.
Video

Video Obama Urges Closer Economic Ties During Historic India Visit

U.S. President Barack Obama says the United States and India must do better to capitalize on untapped potential in their economic relationship - by removing some of the roadblocks to greater trade and investment. As VOA correspondent Aru Pande reports from New Delhi, Obama spoke after participating in India’s Republic Day celebration.
Video

Video US, EU Threaten New Russia Sanctions Over Ukraine

U.S. President Barack Obama has blamed Russia for an attack by Ukrainian separatists that left dozens dead in the port of Mariupol and cast further doubt on the viability of last year’s cease-fire with the Kyiv government. VOA’s Michael Bowman reports from Washington.
Video

Video White House Grapples With Yemen Counterterrorism Strategy

Reports say the U.S. has carried out a drone strike on suspected militants in Yemen, the first after President Barack Obama offered reassurances the U.S. is continuing its counterterrorism operations in the country. The future of those operations has been in question following the collapse last week of Yemen’s government. VOA White House correspondent Luis Ramirez reports.
Video

Video Kerry Warns Against Violence in Nigeria Election

US Secretary of State John Kerry visited Nigeria Sunday in a show of the level of concern within the U.S. and the international community over next month’s presidential election. Chris Stein reports.
Video

Video Zoo Animals Show Their Artistic Sides

The pursuit of happiness is so important, America's founding fathers put it in the Declaration of Independence. Any zookeeper will tell you animals need enrichment, just like humans do. So painting, and even music, are part of the Smithsonian National Zoo's program to keep the animals happy. VOA’s June Soh met some animal artists at the zoo in Washington. Faith Lapidus narrates.
Video

Video Worldwide Photo Workshops Empower Youth

Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video Saudi, Yemen Developments Are Sudden Complications for Obama

The death of Saudi Arabia's King Abdullah and the collapse of Yemen’s government have cast further uncertainty on U.S. efforts to fight militants in the Middle East and also contain Iran’s influence in the region. VOA White House correspondent Luis Ramirez reports on the new complications facing the Obama administration and its Middle East policy.
Video

Video Progress, Some Areas of Disagreement in Cuba Talks

U.S. and Cuban officials are reporting progress from initial talks in Havana on re-establishing diplomatic ties. U.S. Assistant Secretary of State (for Western Hemisphere Affairs) Roberta Jacobson said while there was agreement on a broad range of issues, there also are some “profound disagreements” between Washington and Havana. VOA State Department correspondent Pam Dockins has the story.
Video

Video US, Japan Offer Lessons as Eurozone Launches Huge Stimulus

The Euro currency has fallen sharply after the European Central Bank announced a bigger-than-expected $67 billion-a-month quantitative easing program Thursday - commonly seen as a form of printing new money. Henry Ridgwell reports for VOA from London on whether the move might rescue the eurozone economy -- and what lessons have been learned from similar programs around the world.
Video

Video Nigerian Elections Pose Concern of Potential Conflict in 'Middle Belt'

Nigeria’s north-central state of Kaduna has long been the site of fighting between Muslims and Christians as well as between people of different ethnic groups. As the February elections approach, community and religious leaders are making plans they hope will keep the streets calm after results are announced. Chris Stein reports from the state capital, Kaduna.
Video

Video As Viewership Drops, Obama Puts His Message on YouTube

Ratings reports show President Obama’s State of the Union address this week drew the lowest number of viewers for this annual speech in 15 years. White House officials anticipated this, and the president has decided to take a non-traditional approach to getting his message out. VOA White House correspondent Luis Ramirez reports.
Video

Video S. Korean Businesses Want to End Trade Restrictions With North

Business leaders in South Korea are calling for President Park Geun-hye to ease trade restrictions with North Korea that were put in place in 2010 after the sinking of a South Korean warship.Pro-business groups argue that expanding trade and investment is not only good for business, it is also good for long-term regional peace and security. VOA’s Brian Padden reports.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid