Monday, December 19, 2011

Future need not be rosy but not reddish either

Markets are tizzy at the moment. The economy looks down the drain in the backdrop of global debt crisis; falling rupee; rising inflation; political paralysis and less than estimated GDP growth. But what holds promise is the concern of all and the anxiety to resurrect the sagging economy. Finance Minister has a tough task ahead in the Budget 2012-13, with just an year to go for the General Elections. The fiscal deficit would hardly find space for further doll-outs. The ray of hope is that the US economy promises a revival. The bail-out package to Europe also lends some credence to keep the balance swinging in favour of arresting unrest in the economy. However, the domestic undoing in the last two years unfolding scams after scams needs tackling firmly and this is where the infirmity lies. Markets are not going to behave worse if the FM makes bold to increase the Share transaction tax to at least one percent. Second, the farmers must be provided input subsidies of a larger scale than now but with laid out crop planning regionally acceptable; investmetns in drought proofing the economy; and finding resources for merti goods like education and health at double the rates prevailing now. The year ahead may not be rosy but need not be reddish either.