May 25, 2009|
Can the new FM deliver?
India got its new Finance Minister (FM) in Pranab Mukherjee last weekend. Mr. Mukherjee is not new to this role given that he was also the finance minister in Indira Gandhi's cabinet from 1982-1984 when Dr. Manmohan Singh was serving as the RBI Governor. In fact, in 1984, a Euromoney magazine survey rated him as the best Finance Minister in the world.
Coming back to the present times, things are quite different than they were when Mr. Mukhrejee held this role full-time in the 1980s. India was then a closed economy. Today, it's a part of a highly globalised world where economic barriers are relatively non-existent and the role of a finance minister is much more dynamic and challenging. Over that, he inherits an economy that is now exposed to the worst worldwide recession since the Great Depression of the 1930s.
As such, we would watch with wide eyes how Mr. Mukherjee plays his role. His first action point is not far away given that a full-fledged budget for the current year needs to be announced in just around two months from now.
Given the strong mandate that the UPA has received, Mr. Mukherjee is expected to take advantage of the same and introduce measures to revive the economy amid a worldwide slump. However, in doing this, he already has his hands tied given that India is currently running a very high fiscal deficit and has seen her ratings downgraded to below investment grade by global credit rating firms. Over that, despite the expectations of sweeping reforms in view of the strong political mandate, India still has to deal with a highly corrupt bureaucracy, the 'Babus' who have been a major hindrance in the pro-market reforms of even the previous governments.
Expectations from Mr. Mukherjee seems to be sky high. A quarter of a century after he presented his last budget as a full-time Finance Minister, he is now once again being asked to steer the economy through choppy waters. His success in doing so will go a long way in determining India's ascent to the higher echelons of the global economic order over the next five years.
More Views on News
Jun 10, 2017
Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.
Aug 19, 2017
Ever heard of Lindy Effect? Find out how you can use it to pick timeless stocks.
Aug 18, 2017
Buying the index now will hardly help make money in stocks even in ten years.
Aug 18, 2017
Donald J Trump, a wrasslin' fan, took a 'Holy Sh*t!' blow on Tuesday.
Aug 17, 2017
PersonalFN simplifies the mutual fund account statement for you.
More Views on News
Aug 7, 2017
The data tells us quite a different story from the one the government is trying to project.
Aug 10, 2017
Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 7, 2017
Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407