Disappointing budget for NRIs, stocks

Indian Finance Minister Arun Jaitley’s budget for 2015-2016 on Saturday had a great disappointment for the large community of overseas Indians as much as for the country’s stock exchanges.
All that the government seemed to say was that the non-resident Indians (NRIs) could participate in the nation building activities through their remittances.
In fact, if the country’s foreign exchange reserves continue to swell, it is largely due to the NRI remittances. More than 300 million Indians living abroad and sending home $75 billion a year lead the world in remittances.
Expatriates who make such significant contributions to India’s financial strength have so far not got their due importance.
The government, which rolls the red carpet for foreign direct investors and exporters, does not see expatriates who send home money that is two and a half times that of foreign direct investment.
Expatriates could be given priority in public issues of equities. The 40 percent reservation that was given to NRIs in initial public offerings (IPOs) should be reinstated. Also, the complex procedures for stock market investment could be reviewed.
Expatriates should be allowed to invest in public provident fund. They want housing complexes to be built for them. They should be permitted to invest in agriculture sector. They want a raise in the limit on goods like gold that can be taken home.
The budget also had the Sensex volatile throughout the trading session. The Bombay Stock Exchange, which is usually closed on Saturdays, remained open for the budget. It was down slightly as the lack of major reforms hit investor sentiment. It fell 0.43 percent, or 126.38 points, to 29,093.74 points.
The important health sector also has not received adequate attention and allocation in the budget as we all know Asia’s third-largest economy spends about 1 percent of its gross domestic product (GDP) on public health, compared with 3 percent in China and 8.3 percent in the United States.
The Indian economy is slated to grow at 7.4 percent in the current fiscal year, which ends in March, and will continue to grow between 8.1 and 8.5 percent in the next year.
Despite new figures showing the economy is growing faster than previously thought, many ordinary Indians have yet to feel the benefit and are tired of waiting for change.
However, there seems to be no clear roadmap as to how the government will augment its revenues (Rs.1,41,575 crores) to meet its expenditure (Rs.1,777,477 crores) during the year.

— khalil@arabnews.com