Time for a new ball

As the tide of the pandemic turns, the government is returning to the task of making India a US$5 trillion economy by 2024-25.

While many question if this is possible, India’s finance minister says achieving it will require double digit growth in manufacturing on a sustained basis. The country’s manufacturing companies will need “to become an integral part of global supply chains, possess core competence and cutting-edge technology”. That’s the plan, but can India up its game sufficiently to realize these goals?

Many, revelling in the country’s remarkable recent victories on the cricket pitch, will say nothing is impossible. Indeed, the minister’s budget speech used India’s triumph in Australia to remind us of the Indian people’s “abundant promise and unsuppressed thirst to perform and succeed”.

But while sentiment inspires and emboldens, investors both inside and outside India are more focused on the nitty gritty of policy measures being contemplated and executed. Of particular interest is the proposal in the budget to allow foreign direct investment of 74% in insurance companies, and to allow foreign ownership and control albeit with safeguards.