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

How to Safeguard Your Mobile Privacy

As the digital world becomes more mobile, so too do concerns about eroding privacy and increased hacking More

'Desert Dancer' Chronicles Iranian Underground Dance Troupe

Film by Richard Raymond is based on true story of Afshin Ghaffarian and his friends More

Researcher: Obesity Poses Complex Problem

Professor at Symposium on Obesity, Diabetes and Metabolic Syndrome says problem involves more than calorie intake, warns of worldwide health impact 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.
Scientists Say Plankton More Important Than Previously Thoughti
X
George Putic
May 26, 2015 9:26 PM
Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video Scientists Say Plankton More Important Than Previously Thought

Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video Kenyans Lament Losing Sons to al-Shabab

There is agony, fear and lost hope in the Kenyan town of Isiolo, a key target of a new al-Shabab recruitment drive. VOA's Mohammed Yusuf visits Isiolo to speak with families and at least one man who says he was a recruiter.
Video

Video US-led Coalition Gives Some Weapons to Iraqi Troops

In a video released Tuesday from the Iraqi Ministry of Defense, Iraqi forces and U.S.-led coalition troops survey a cache of weapons supplied to help Iraq liberate Mosul from Islamic State group. According to a statement provided with the video, the ministry and the U.S.-led coaltion troops have started ''supplying the 16th army division with medium and light weapons in preparation to liberate Mosul and nearby areas from Da'esh (Arabic acronym for Islamic State group).''
Video

Video Amnesty International: 'Overwhelming Evidence' of War Crimes in Ukraine

Human rights group Amnesty International says there is overwhelming evidence of ongoing war crimes in Ukraine, despite a tentative cease-fire with pro-Russian rebels. Researchers interviewed more than 30 prisoners from both sides of the conflict and all but one said they were tortured. Henry Ridgwell reports for VOA from London.
Video

Video Washington Parade Honors Those Killed Serving in US Military

Every year, on the last Monday in the month of May, millions of Americans honor the memories of those killed while serving in the armed forces. Memorial Day is a tradition that dates back to the 19th Century. While many people celebrate the federal holiday with a barbecue and a day off from work, for those who’ve served in the military, it’s a special day to remember those who made the ultimate sacrifice. Arash Arabasadi reports for VOA from Washington.
Video

Video Kenya’s Capital Sees Rise in Shisha Parlors

In Kenya, the smoking of shisha, a type of flavored tobacco, is the latest craze. Patrons are flocking to shisha parlors to smoke and socialize. But the practice can be addictive and harmful, though many dabblers may not realize the dangers, according to a new review. Lenny Ruvaga has more on the story for VOA from Nairobi, Kenya.
Video

Video Rolling Thunder Run Reveals Changed Attitudes Towards Vietnam War

For many US war veterans, the Memorial Day holiday is an opportunity to look back at a divisive conflict in the nation’s history and to remember those who did not make it home.
Video

Video Female American Soldiers: Healing Through Filmmaking

According to the United States Defense Department, there are more than 200-thousand women serving in the U.S. Armed Forces.  Like their male counterparts, females have experiences that can be very traumatic.  VOA's Bernard Shusman tells us about a program that is helping some American women in the military heal through filmmaking.
Video

Video Iowa Family's Sacrifice Shaped US Military Service for Generations

Few places in America have experienced war like Waterloo. This small town in the Midwest state of Iowa became famous during World War II not for what it accomplished, but what it lost. As VOA’s Kane Farabaugh reports, the legacy of one family’s sacrifice is still a reminder today of the real cost of war for all families on the homefront.
Video

Video On Film: How Dance Defies Iran's Political Oppression

'Desert Dancer' by filmmaker Richard Raymond is based on the true story of a group of young Iranians, who form an underground dance troupe in the Islamic Republic of Iran. This is the latest in a genre of films that focus on dance as a form of freedom of expression against political oppression and social injustice. VOA’s Penelope Poulou has more.
Video

Video Turkey's Ruling Party Trying to Lure Voters in Opposition Stronghold

Turkey’s AK (Justice and Development) Party is seeking a fourth successive general election victory, with the goal of securing two-thirds of the seats in Parliament to rewrite the constitution and change the country's parliamentary system into a presidential one. To achieve that, the party will need to win seats in opposition strongholds like the western city of Izmir. Dorian Jones reports.
Video

Video Millions Flock to Ethiopia Polls

Millions of Ethiopians cast their votes Sunday in the first national election since the 2012 death of longtime leader Meles Zenawi. Mr. Meles' party, the Ethiopian People's Revolutionary Democratic Front, is almost certain of victory again. VOA's Anita Powell reports from Addis Ababa.

VOA Blogs