Everyone is talking about China and India as the next big global markets. India’s growing economy has made it one of the most important markets. The world focus is now on Asia.
About six months ago, the UPA government was seen as hopeless and stuck with policy paralysis. It was accused of being a lame-duck government, whose survival depended on unpredictable allies. But since Pranab Mukherjee went on to become the President, it seems to have had a rippling effect. And since Chidambaram became Finance Minister, the same government has started looking energetic reformer, that means serious business. The Finance Minister must be applauded for having immediate goals such as stabilization of the rupee. Though he ventures to tackle the economic meltdown, inflation and the tax regime, he must also restore the confidence of foreign investors.
Fearing loss of face in Parliament, FDI in multi-brand retail has been pushed through. Rail fares have been hiked, diesel prices are going to rise every month till the burden of subsidy disappears, a cap has also has been put on LPG connections, and foreign investors have been assured on general anti avoidance tax measures. Economists and financial experts are wondering if this sudden transformation and bold decision has sound footing of figures and facts. Will Chidambaram be able to pull off successfully?
With Pranab Mukherjee going on to become the President, Sonia Gandhi and other top leadership in Congress were convinced, Chidambaram be given the responsibility of the new approach. And it seems to be working. Foreign investors have brought in $7.8 million in the last two months. The rupee has strengthened. Despite a increase in diesel price, the wholesale price inflation has fallen below 7 per cent with some indications of consumer prices following suit.
Things have eased a bit, but a lot needs to be done. Many hurdles still remain, however the mood has changed from what looked like doom, to gloom to hope of a better 2013-2014, to possibly boom? The new economic push looks to stay for the rest of the UPA’s term. But will this make over and positivism guarantee election victory for UPA is to be seen. Certainly it does predict a better outcome than seemed likely in the troubled days of mid 2012.
All eyes will be on the Finance Minister and his impending budget for 2013-14. Chidambaram is expected to satisfy the common man, the business community, corporates, his UPA allies and also the international business world.