Time To Take Stock
The Telegraph, 25.02.2005
So far the signs for the 2005–06 Union budget are encouraging (“Before the unveiling”, Feb 23). The freedom for merger and acquisition assured to public sector banks will boost the banking sector. Despite vehement opposition from the left, the finance ministry has shown a lot of wisdom in trying to implement this measure. It will allow public sector banks to increase in size and thus gain from economies of scale, which consequently will mean cheaper products for the Indian consumer.
In this budget, the government is expected to bring in the long overdue special economic zone policy and increase FDI investment in sectors such as retail and banking. This will give a fillip to exports and with increased FDI in retail, a sector long haunted by protectionism, India might finally grow to be a retail giant. Together with the government’s commitment to implement value added tax, this will improve the fiscal scenario.