The main focus of Wednesday’s Indian budget is likely to be boosting discretionary spending and employment generation, as the government’s decision to withdraw high-value currency notes (known as demonetisation) has put pressure on the economy. While the economy has the potential to recover from this slowdown, providing policy support now would make that potential recovery even stronger and broader. Special attention might be given to improving the business environment by simplifying regulations, pushing ahead with the reform agenda and adding predictability and simplicity to the tax regime.
A major concern has been the prolonged weakness in private investment, which has to pick up for the country’s economic development to be sustainable. Since low capacity utilisation is among the factors that are believed to be forcing Indian companies to hold back on capital expenditure, a positive demand shock is needed. This calls for higher capital outlay towards infrastructure development and measures to put more money in the hands of consumers.
Also, lowering the corporate tax rate below 20 per cent – it is now around 30 per cent – together with the implementation of a goods and services tax (GST) would not only boost domestic business confidence and job creation but also facilitate stable foreign capital inflows.
Additionally, the budget is likely to shed light on the government’s stance on the long-term capital gains taxation regime by clarifying whether it wants to tweak the holding period for gains or increase tax rates.
Since financing infrastructure development requires fiscal space, the finance minister, Arun Jaitley, might opt for a flexible fiscal deficit target for the next financial year and raise the disinvestment target. The current financial year’s deficit target is 3.5 per cent and the government is on track to meet it.
Bringing India’s rank within the top 50 in the World Bank’s Doing Business Report, as the government envisages, requires more policy initiatives. India is currently ranked 130, versus 131 the year before.
Measures such as encouraging competition among states to attract investment and setting up a dedicated task force in each department to monitor the reform process are well thought out, and the budget is likely to signal to more initiatives aiming at improving ground-level implementation. It must also stress on swiftly addressing disputes related to public and private partnerships (PPP) to unclog stalled projects.
The MSME (micro, small and medium enterprises) sector is an important job creator and needs cheaper capital and easy regulations. Additionally, the government’s campaign to boost start-ups should be given a renewed push, especially as start-ups will play a key role in creating jobs in the coming years. Measures needed to encourage investment and innovation in the service sector, so as to enable players in the industry to further improve the quality of delivery.
While demonetisation set the tone for a strengthened digital agenda, the budget must bring about a plethora of incentives to make digital transactions a way of life for citizens. Measures must target the digitalisation of mass payments such as salaries, health care and education. The budget must present clear signs that last-mile connectivity and cyber-security will be augmented markedly, so digitisation can become attractive to individuals and corporations alike. Initiatives should aim to promote digital as the easiest, safest and most ecological way of transactions.
The rural economy is vital to enable India’s long-term growth targets. And agriculture, being the backbone to more than half of rural households, needs to be the prime focus for the government’s plans for the coming fiscal year. Cheaper access to finance, augmented infrastructure and the arrival of technology must be prioritised.
Modern seed technologies and agricultural biotechnology have been embraced by several Asian economies, such as Japan and Malaysia. India should aim to make strides on these areas. This requires incentivising agriculture research by public and private institutes. Such initiatives might lead to new agricultural intellectual property, less dependence on imported seeds and stronger agricultural manufacturing. Thus one can expect the budget to lay greater emphasis on agriculture research and development.
The social sector should also receive special attention. Public expenditure on health and education has to be increased substantially to expand the health cover for the population, and to modernise and otherwise improve India’s education system. The budget might also include higher allocation for skill development.
In sum,Wednesday’s budget is likely to emphasise a better business environment, quality infrastructure, a stable tax regime and an adequately funded social sector, which are imperative for long-term growth.
Richard Rekhy is the chief executive of KPMG India
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COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
THE LIGHT
Director: Tom Tykwer
Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger
Rating: 3/5
Europe’s rearming plan
- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital
UAE rugby season
FIXTURES
West Asia Premiership
Dubai Hurricanes v Dubai Knights Eagles
Dubai Tigers v Bahrain
Jebel Ali Dragons v Abu Dhabi Harlequins
UAE Division 1
Dubai Sharks v Dubai Hurricanes II
Al Ain Amblers v Dubai Knights Eagles II
Dubai Tigers II v Abu Dhabi Saracens
Jebel Ali Dragons II v Abu Dhabi Harlequins II
Sharjah Wanderers v Dubai Exiles II
LAST SEASON
West Asia Premiership
Winners – Bahrain
Runners-up – Dubai Exiles
UAE Premiership
Winners – Abu Dhabi Harlequins
Runners-up – Jebel Ali Dragons
Dubai Rugby Sevens
Winners – Dubai Hurricanes
Runners-up – Abu Dhabi Harlequins
UAE Conference
Winners – Dubai Tigers
Runners-up – Al Ain Amblers
Going grey? A stylist's advice
If you’re going to go grey, a great style, well-cared for hair (in a sleek, classy style, like a bob), and a young spirit and attitude go a long way, says Maria Dowling, founder of the Maria Dowling Salon in Dubai.
It’s easier to go grey from a lighter colour, so you may want to do that first. And this is the time to try a shorter style, she advises. Then a stylist can introduce highlights, start lightening up the roots, and let it fade out. Once it’s entirely grey, a purple shampoo will prevent yellowing.
“Get professional help – there’s no other way to go around it,” she says. “And don’t just let it grow out because that looks really bad. Put effort into it: properly condition, straighten, get regular trims, make sure it’s glossy.”
The years Ramadan fell in May
What is a robo-adviser?
Robo-advisers use an online sign-up process to gauge an investor’s risk tolerance by feeding information such as their age, income, saving goals and investment history into an algorithm, which then assigns them an investment portfolio, ranging from more conservative to higher risk ones.
These portfolios are made up of exchange traded funds (ETFs) with exposure to indices such as US and global equities, fixed-income products like bonds, though exposure to real estate, commodity ETFs or gold is also possible.
Investing in ETFs allows robo-advisers to offer fees far lower than traditional investments, such as actively managed mutual funds bought through a bank or broker. Investors can buy ETFs directly via a brokerage, but with robo-advisers they benefit from investment portfolios matched to their risk tolerance as well as being user friendly.
Many robo-advisers charge what are called wrap fees, meaning there are no additional fees such as subscription or withdrawal fees, success fees or fees for rebalancing.
In numbers
Number of Chinese tourists coming to UAE in 2017 was... 1.3m
Alibaba’s new ‘Tech Town’ in Dubai is worth... $600m
China’s investment in the MIddle East in 2016 was... $29.5bn
The world’s most valuable start-up in 2018, TikTok, is valued at... $75bn
Boost to the UAE economy of 5G connectivity will be... $269bn
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Five famous companies founded by teens
There are numerous success stories of teen businesses that were created in college dorm rooms and other modest circumstances. Below are some of the most recognisable names in the industry:
- Facebook: Mark Zuckerberg and his friends started Facebook when he was a 19-year-old Harvard undergraduate.
- Dell: When Michael Dell was an undergraduate student at Texas University in 1984, he started upgrading computers for profit. He starting working full-time on his business when he was 19. Eventually, his company became the Dell Computer Corporation and then Dell Inc.
- Subway: Fred DeLuca opened the first Subway restaurant when he was 17. In 1965, Mr DeLuca needed extra money for college, so he decided to open his own business. Peter Buck, a family friend, lent him $1,000 and together, they opened Pete’s Super Submarines. A few years later, the company was rebranded and called Subway.
- Mashable: In 2005, Pete Cashmore created Mashable in Scotland when he was a teenager. The site was then a technology blog. Over the next few decades, Mr Cashmore has turned Mashable into a global media company.
- Oculus VR: Palmer Luckey founded Oculus VR in June 2012, when he was 19. In August that year, Oculus launched its Kickstarter campaign and raised more than $1 million in three days. Facebook bought Oculus for $2 billion two years later.
Vidaamuyarchi
Director: Magizh Thirumeni
Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra
Rating: 4/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
COMPANY PROFILE
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
