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

Nigeria Incumbent in Tight Spot as Poll Nears

Muhammadu Buhari is running a strong challenge to Goodluck Jonathan, amid a faltering economy and Boko Haram security worries More

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo tells VOA that despite her fame, life is still a struggle as she waits for government's promise of support to arrive More

Video Cambodian Land Grabs Threaten Traditional Communities

At least seven different indigenous groups in Ratanakiri depend mainly on forest products for their survival, say they face loss of their land, traditional way of life 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.
Liberia's Almost Last Ebola Patient Grateful but Still Grievingi
X
Benno Muchler
March 26, 2015 3:41 PM
Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Cambodian Land Grabs Threaten Traditional Communities

Indigenous communities in Cambodia's Ratanakiri province say the government’s economic land concession policy is taking away their land and traditional way of life, making many fear that their identity will soon be lost. Local authorities, though, have denied this is the case. VOA's Say Mony went to investigate and filed this report, narrated by Colin Lovett.
Video

Video US, South Korea Conduct Joint Military Exercises

The Eighth U.S. Army Division and the Eighth Republic of Korea Mechanized Infantry Division put on a well orchestrated show of force for the media this week during their joint military training exercises in South Korea. VOA’s Seoul correspondent Brian Padden was there and reports the soldiers were well disciplined both in conducting a complex live fire exercise and in staying on message with the press.
Video

Video Space Program Status Disappoints 'Last Man on the Moon'

One of the films that drew big crowds last week at the annual South by Southwest festival in Austin, Texas, tells the story of the last human being to stand on the moon, U.S. astronaut Eugene Cernan. It has been 42 years since Cernan returned from the moon and he laments that no one else has gone there since. VOA’s Greg Flakus reports.
Video

Video Young Filmmakers Shine Spotlight on Giving Back

A group of student filmmakers from across the United States joined President Barack Obama at the White House this month for the second annual White House Student Film Festival. Fifteen short films were officially selected from more than 1,500 entries by students aged 6 through 18. The filmmakers and their families then joined the president and a group of celebrities for a screening of their films. VOA’s Julie Taboh reports.
Video

Video VOA Exclusive: Interview with Afghan President Ashraf Ghani

Afghan President Ashraf Ghani, during his first visit as president to Washington, gave a one-on-one interview with VOA Afghan Service reporter Said Suleiman Ashna, about his request for a change in U.S. troop levels, the threat from the Islamic State, and repairing relations with the United States and Pakistan. The interview was held at Blair House, late Sunday, in Pashto.
Video

Video California Science Center Tells Story of Dead Sea Scrolls

The ancient manuscripts were uncovered in the mid-20th century, and they are still yielding clues about life and religious beliefs in ancient Israel. As VOA's Mike O'Sullivan reports, an exhibit in Los Angeles shows how modern science is bringing the history of these ancient documents to life.
Video

Video Angelina Jolie Takes Another Bold Step

Hollywood actress and filmmaker Angelina Jolie has revealed she had her ovaries and fallopian tubes removed to lower her odds of getting cancer. Doctors say the huge publicity over her decision will help raise awareness about the importance of cancer screening. VOA’s George Putic has more

All About America

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