Is India still a preferred investment desti-nation?

Is India still a preferred investment desti-nation?

The potholes in the journey:

· Sinking GDP growth well below expectation: below 5% in FY 12-13. Q-on-Q  projections continue to fail.

o Govt must loosen its wallet strings to fund infrastructure projects across country.

o It is prudent to release major amount of money for infra projects primarily road, highways connecting major cities as well as rural roads

· Food Inflation (despite the government’s claims; aam aadmi has no respite from the food inflation)

FOOD Security bill:

o State governments must create a common knowledge pool for inclusive and sustainable rural development and agricultural produce.

• Central agencies shall take initiative under Agriculture Ministry

§  Focus on increasing agriculture produce

§  Need to launch another operation ‘Green’ and ‘Flood’

§  Increase Agriculture, Poultry, Dairy, Fisheries produce

·         Major dent of INR 3.5 trillion on exchequer as a result of Food security bill

REVENUE DEFICITS:

o   Both State and Central Govts shall bear the burden and simultaneously try to identify new source of revenues including increase in direct and indirect tax collections

o   DTC could be a major revenue driver

·         Fiscal deficit

·         Declining Rupee

o   This has been addressed to some extent  as dollars have started flowing in

·         Expensive Oil & Gas

·         Lack of implementation of reforms

·         Rising interest rates (rising NPAs of Banks)

·         Dip in industrial and manufacturing growth rate

·         FIIs pulling out investments from India

·         Grim situation in basic health, education, infrastructure, law & order

·         General elections in 2014

·         Indecision tendency of government

Major Legislations hanging with a thread in thin air

o   Lokpal

o   Land Acquisition

o   Real Estate Regulatory Bill

o   Pension Bill

o   100% FDI in Indian Retail

o   GST

o   Mining Bill