News Analysis - Economic Reforms



Economic Reforms

  • SEZs Exports Nearly USD 5B (March 19, 2007)
    The Industry and Commerce Ministry has projected exports from 63 Special Economic Zones (SEZs) operational since February 2006 to be about Rs. 21,631 crore (USD 5 billion) out of an investment of Rs. 13,435 crore (USD 3 billion).<More>

  • Chola's Overseas Fund (March 13, 2007)
    DBS Chola Mutual Fund plans to launch a scheme to invest exclusively in overseas assets to allow investors to spread their risks better and reduce country risk and this fund provides a unique opportunity to Indian investors.<More>

  • Indians Buying Malaysia Property (March 12, 2007)
    About 700 rich Indians, businessmen, and film stars seem to buying property for residential properties in Kuala Lumpur after Malaysian Government modification of rules regarding foreign ownership of property in December 2006.<More>

  • Disinvestment Has Morphed, Restarted (February 09, 2007)
    In a bid to restart disinvestment policy stalled by allies of the government, Finance Minister P. Chidambaram said that the cabinet has approved the offload of a small part of its holding in three public sector power companies.<More>

  • Achieving a Sustainable Economic Growth Rate (February 08, 2007)
    In yesterday's piece "Is the Economic Growth Sustainable?" we showed that the Indian economy has excellent fundamentals but is also riddled with risk. In this article, we will list various fixes that are necessary to ensure that the growth rate continues.<More>

  • Singapore Distraught About SEZ Freeze (February 07, 2007)
    The Singapore government has demanded explanation from the government on the recent policy to freeze the Special Economic Zone (SEZ) approvals and notifications.<More>

  • Is the Economic Growth Sustainable? (February 07, 2007)
    If economic reforms keep pace, in the next several years, the Indian economy is expected to pass Italy, France, and the UK and become the fifth largest in the world spurred by more efficient industries competing with the global system.<More>

  • Govt to Buy SBI, NABARD off RBI (February 06, 2007)
    In a surprising move, the government has decided to buy India's largest bank State Bank of India (SBI) and National Bank for Agriculture and Rural Development (NABARD) from the current holders Reserve Bank of India (RBI).<More>

  • Farmers to Co-Own SEZs (February 05, 2007)
    With increased opposition from farmers over arbitrary allocation of farm land for Special Economic Zone (SEZ) industrialization, the federal government seems to have evolved a formula where the dispossessed farmers may co-own SEZs.<More>

  • Indian Economy to Surpass US by 2050 (January 29, 2007)
    A recent Goldman Sachs study projected that India, along with China, will surpass the US economy by 2050 as India has moved onto a much faster trajectory fueled by strong and steady manufacturing productivity gains.<More>

  • “Red Tapism” Slowing Indo-UK Trade (January 25, 2007)
    Chairman of the Indo-British Partnership Network (IBPN) Lord Karan Bilimoria said in an interview with the Times of India that although “reduced to a great extent,” the biggest bottleneck to further bilateral trade is “Red tapism.”<More>

  • M&A Worth $8B in FDI (January 24, 2007)
    Global economists have predicted that the “high performance of the Indian economy” infused by “the improving policy environment” is expected to accelerate “direct investment” to USD 8 billion from USD 6.5 billion the previous year.<More>

  • Stalemate on SEZ (January 23, 2007)
    The Empowered Group of Ministers (EGoM) for Special Economic Zones (SEZs) ended its review meeting “inconclusively” but said that it is considering ways of infusing “export obligations” in order to differentiate between proposals.<More>

  • India Bullish on Growth (January 23, 2007)
    A recent survey of 200 business houses found that business confidence index for October 2006-March 2007 was higher by 2.5 points at 71.8 from the previous 6 months and 85% of the respondents revealed plans for increased investments.<More>

  • Over 200m Jobs by 2020: Brown (January 22, 2007)
    British Prime Minister in waiting and Chancellor of the Exchequer Gordon Brown said that India is set to create 25% of extra jobs or an estimated 200 million jobs by 2020 which will be more than the numbers created in the US, Europe, and China put together.<More>

  • FDI Grows 120% (January 22, 2007)
    Commerce & Industry Minister Kamal Nath said that Foreign Direct Investment (FDI) inflow surpassed all previous projections and is expected to grow at 120% to USD 15 billion this fiscal year.<More>

  • SEZ Policy on Hold (January 20, 2007)
    Spreading protests from farmers arbitrarily thrown out of their land for below-the-market payments to create under-planned Special Economic Zones (SEZ) has prompted the government to suspend this policy.<More>

  • FDI & FII May be Merged (January 17, 2007)
    The government is reportedly mulling to amend the Foreign Exchange Management Act (FEMA) to remove theoretical distinction between foreign direct investment (FDI) and foreign institutional investor (FII). <More>

  • 2006 Exports Topped Expectations (January 11, 2007)
    Indian exports achieved a key milestone when it crossed the psychological barrier of USD 100 billion in 2006 with a growth rate of 24% and over 13% of total gross domestic product (GDP) valued at USD 800 billion compared to 6% in 1990-91.<More>

  • Problems with SEZ Policy (January 11, 2007)
    The Industry and Commerce Ministry has rightfully taken credit for the creation of the Special Economic Zones (SEZ) Act 2005 but the policy lacks transparency and seems ad hoc in implementation.<More>

  • RBI Rate-Based Navigation (January 04, 2007)
    While the economy was in full throttle last year, increasing concerns on excess liquidity and inflation saw the Reserve Bank of India (RBI) trying to steer the economy to sustainable levels through a process of rate hikes.<More>

  • Energy Concerns & Alternatives (December 25, 2006)
    As India’s economy grows at a breathtaking 9.1% its hunger for energy to sustain this growth is higher and though per capita energy consumption is relatively low, its energy use is expected to surpass Russia and Japan to be the third largest consumer of energy by 2030.<More>

  • Govt to Divest from Maruti (December 23, 2006)
    After 25 years of partnership with Japanese Suzuki Motors through Maruti Industries, the Government has decided to sell its remnant 10.27% stake for an estimated Rs. 2,700 crore (USD 586 million) to overcome budget deficits.<More>

  • Sustainable 9% GDP Growth (December 21, 2006)
    Led by strong manufacturing growth, the economy grew at a robust 9.1% in the first half of fiscal year with exports clocking 34.9% prompting the government to claim that the growth pattern “reflected the ability of Indian manufacturers to meet international standards.”<More>

  • Mining Policy to Attract FDI (December 13, 2006)
    A new mining policy is being formalized aiming to attract more foreign direct investment (FDI) through joint ventures which is now only USD 150 million and the new target investment value is Rs. 100,000 crore (USD 22.22 billion) in the next 2 years.<More>

  • China’s Threatening Maritime Plans (December 08, 2006)
    Naval Chief Admiral Sureesh Mehta warned that China’s maritime plans, co-opting neighboring nations including Myanmar, Pakistan, Sri Lanka and Eastern African nations, could be used against India in the future.<More>

  • Mauritius Tax Treaty in Trouble (December 06, 2006)
    The Indo-Mauritius comprehensive economic cooperation and partnership agreement (CECPA) bilateral treaty covering investment and trade in goods and services has hit a hurdle with New Delhi demanding disclosure of cover-up companies hiding identities.<More>

  • Govt Promises Economic Reforms (November 28, 2006)
    India is planning to allow foreign direct investment (FDI) in the healthcare and education sectors, continue with reforms in the financial sector, and dilute government equity in public sector enterprises through the Initial Public Sector Offering (IPO) route.<More>

  • Railways Profits Up (November 24, 2006)
    The largest railways in the world, the Indian Railways, reported earnings in November at Rs. 1706 crore (USD 370 million) and an increase of 22% from last year due to better freight and passenger capacity utilization.<More>

  • India Most Favored Investment Destination (November 16, 2006)
    A Bank of America (BoA) study found that the average inflow into Indian bonds, equities, and loan vehicles increased 158.4% more than thrice the emerging world average of 40.3% as corporate investments was pegged at USD 19.3 billion in 2005.<More>

  • China Pushing FTA (November 08, 2006)
    An important component in Chinese President Hu Jintao’s visit will be a push India to grant it a “market economy” status through a free trade agreement (FTA), something that most developed economies have so far refused.<More>

  • India 3rd Largest Investor in Belgium (November 08, 2006)
    Making a strong pitch for Indian investments in Belgium, visiting Prime Minister Guy Verhofstadt said that his country has fought red tape and liberalized tax and labor laws and is becoming a “magnet” for investments making India is the 3rd largest investor.<More>

  • Disinvestment Not for Judicial Review (November 02, 2006)
    Removing a major obstacle to disinvestment, the Supreme Court (SC) threw out a case filed by a labor union challenging the sale of a Government-owned hotel citing a Disinvestment Commission (DC) report recommending the sale of this non-core asset.<More>

  • Y-on-Y Industrial Growth Higher (October 13, 2006)
    An upsurge in manufacturing took cumulative industrial production from April-August to 10.6 compared to 8.7 last year and August saw a 9.7% rise compared to 7.6% but lower than July’s growth of 12.7% but analysts say that consumer demand has not slacked.<More>

  • India , Britain Share Terror Concerns (October 12, 2006)
    Visiting Britain right after the North Korean (NK) nuclear test, Prime Minister Manmohan Singh and British Prime Minister Tony Blair concluded their third annual summit and discussed terrorism, energy cooperation, and investment promotion.<More>

  • Macro Indicators Strong, Agri Worrisome (October 11, 2006)
    Although economic growth is at 7.5%-8%, inflation in check at 5%-5.5%, investments in Telecom & IT estimated at USD 16 billion, and more reforms on financial and retail sector in the offing, the Indian economy continues to roar but Agriculture continues to be a major worry.<More>>

  • 31 New SEZ (October 03, 2006)
    Despite intense opposition and public debate over Special Economic Zones (SEZs) policy, the Board of Approvals (BoA) cleared 31 proposals including the South Korean Posco’s proposal for a Rs. 55,000 crore (USD 12 billion) steel project.<More>

  • Commies Blocking Labor Reforms (September 27, 2006)
    Often portrayed as a capitalist communist of the modern Chinese variety, West Bengal Chief Minister Buddhadev Bhattacharjee conceded that “globalization is inescapable” but told Industry representatives that major labor reforms are unnecessary.<More>

  • OECD Asks India to Overhaul Regulations (September 20, 2006)
    An influential international body advised India to overhaul its outdated business regulations such as reservations for small firms, tariff structures, and labor laws for large companies to derive benefits from global economy such as investments and technology.<More>

  • India , China Asian Economic Growth Engines  (September 19, 2006)
    The International Monetary Fund (IMF) projected India ’s Gross Domestic Product (GDP) growth at 8.3% this year and 7.3% in 2007 but but cautioned financial managers on inflation due to oil prices and strong domestic demand and budget deficit.<More>

  • US Says Reforms Stalled, Growth Up (September 15, 2006)
    The US Ambassador to India David Mulford voiced concerns of the investment community that the coalition politics has caused a “a pause in the reform process” and warned of “serious economic costs to any loss of momentum on the reform front.”<More>

  • IMF Asks for Financial Reform (September 08, 2006)
    Visiting International Monetary Fund (IMF) Managing Director Rodrigo de Rato said that “There is a need to make the financial system more efficient” and the “structural reforms” is required for India “more capable of benefiting from world economy.”<More>

  • Govt Proposes MNC Audit (September, 06 2006)
    A senior Finance Ministry official said that India is thinking of starting joint audits for multi-nationals (MNCs) operating in India and the ASEAN region to ensure that the balance sheets match those of their annual statements.<More>

  • Economic Growth Promising, SEZ Model Questioned (September, 05 2006)
    In a positive sign, the Reserve Bank of India (RBI) said that “growth momentum of recent years is likely to continue during the year” but cautioned on the Special Economic Zones (SEZ) as a model for developing industries and generating jobs.<More>

  • Corp Expansion despite Stalled Reforms (August 24, 2006)
    Despite a stalled disinvestment process and halt to reforms, several positive factors in the Indian economy, perhaps not to the optimal level, have emerged encouraging targeted overseas mergers and acquisitions (M&A) by many Indian companies.<More>

  • Govt Plans to Sell Residual Maruti Interest (August 22, 2006)
    Faced with increasingly recalcitrant and belligerent opposition from communist allies to disinvestment plans, the Government is apparently proposing to sell all its residual 10.24% stake in Maruti Udyog Limited (MUL) to net Rs. 2500 crore (USD 543 million).<More>

  • Subsidy Cuts on the Cards (August 17, 2006)
    Facing unending global fuel price increases and increasingly exposed to global economy, Prime Minister Manmohan Singh reminded the nation that Government cannot on indefinitely subsidize consumption as there were limits to budgets.<More>

  • Forbes Calls “India is next Great Bull Market” (August 09, 2006)
    Confirming other expert opinion, Forbes magazine says that “India has strong potential to be the next great bull market of the 21st century” clearly outpacing China as a better investment opportunity.<More>

  • Indian Companies Make Large Global Buys (July 12, 2006)
    The unprecedented growth of Indian economy is spurring Indian companies to scale their operations to inorganic overseas acquisitions with some of them larger than the Indian operation.<More>

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