January 31, 2017

Budget: India's Got a Reputation Problem

One of the least enviable jobs in the world at the moment has to be that of Indian finance minister. Arun Jaitley will present his fourth annual budget to India’s Parliament on Wednesday amid terrible headwinds -- mostly caused by his government’s bewildering and disruptive decision to invalidate 86 percent of India’s currency last November. If he’s to revive growth, the first thing he has to do is rethink his priorities.

The scale of the challenge should be clear. The government’s official estimate of 7.1 percent GDP growth this financial year (which began in April) is widely doubted and doesn’t take into account the chaos wrought by demonetization. The International Monetary Fund predicts growth will come in closer to 6.6 percent, or a full percentage point below earlier estimates. And these numbers conceal even more weaknesses. Most glaringly, Indian investment has shrunk for the last three quarters for which reliable data is available.

Read more at https://www.bloomberg.com/view/articles/2017-01-29/new-budget-must-address-india-s-reputation-problem

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