The UPA government had definitely lost the initiative and unless extensive rear guard action is planned by Sh Manmohan Singh, the loss of spirit in UP is likely to pervade the remaining two budgets ( if both are indeed presented) to go thru in the muddled manner that at least brings vote to Madam in the east, while gujarat and Karnataka look well out of grasp and maybe even MP in the next round of by elections. But then , given only $1 bln in FDI in December, we have been forced oto post political commentary like this on our Deal Post..and this is hopefully yet economic and banking related discusion on the coming budget.

The 2012 hopes for a consumer led revival including NBFC and retail unsecured credit for banks, lowering rates , making healthy NIMs and a new fiscal year meaning capital infusions ( not just the letters) for carrying NPAs in case of public enterprises for example.

LIC will be under the scanner, but again we digress from the Budget proposals. Hope comes in terms of DTC proposals, making Pranab Da's task difficult from the frst ball, as he sets down to publicly downsell such hopes as DTC GST and others like a targeted Fisc in favor of diluted middle of the lane proposals with virtually no Economic impact. Services may lead revenue upticks in FY13 and as of now that is one safe tactic qavailable to budget planners which shoul dbe used aggressively, planning for a 30% revenue uptick helped by the Service tax on negative list  and the new DTC with appropriate bells and whistles ine xemptions, as also recommended by the Parl panel and which will remain UPA's legacy, whatever other parties might think.

The Divestment target should remain high and we should proceed forward on our higher percentage of Revenue to GDP to more than 20% whatever be the political exigencies. On the flip side, Exports would have a difficult task of staying in the rosy lane esp if production dows not pick up more than afew pips, even as investment is again led by public investments in infrastructure and even Food security and employment

Posted via email from The India Investment Post