Indian Prime Minister Narendra Modi’s first budget may need to focus on the industrial side of the country. Economists are seeing that industrial manufacturing for export goods and infrastructure improvement are the key factors that would help India rise up using the proposed budget.
Economists said that 15% of India’s GDP comes from manufacturing. However, the slow economic recovery is further inflamed with the rising cost of living, given that India continuously imports more than it exports. The trade gap had lowered the country’s currency value.
The new budget is expected to aid route development that will accelerate the growth of large-scale manufacturing, and making lax the foreign investment rules for Indian firms. The limit of ownership is restricting the entry of other foreign companies and investors, given that 26% is the only stake given for foreign investors.
Route development is also part of the infrastructure development that economists expect to see in the budget. Indian roads are still problematic and daily electricity interruptions make business difficult for local and foreign businesses. Modernising India will need trillions of pounds, but investor confidence could rise with this improvement.
Modi is also expected to straighten out the tax issues in the country, which had driven away many foreign investors. The new government said that it would respect existing tax laws, but it would definitely work on improving the tax laws for businesses. Many businesses complain that the taxes disallow them to optimise their operating costs due to heavy restrictions and red tape.