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  • OUTLOOK ARENA  >>   VIEWS ON NEWS >>  JULY 9, 2004

    Ashwin Dani, MD. Asian Paints
    MYSTOCKS | FREE NEWSLETTER

    Mr. Ashwin Dani started his career as a development chemist with BASF, Detroit and joined Asian Paints in 1968 as a senior executive. He is currently the Vice-Chairman and Managing Director of Asian Paints Limited, the market leader in the Indian paint industry. He was instrumental in setting up joint venture between Asian Paints and PPG industries of USA. Mr. Dani is a science graduate and has completed Masters degree in polymer science from University of Akron, Ohio.

    In an exclusive, Mr. Ashwin Dani expressed his views on the budget and the impact it is likely to have on the Indian economy.

    The seven point common minimum programme that was announced by the finance minister provides the right direction for economic policies of the country. It aims to strike a good balance between growth, stability and equity. The emphasis on rural India should spur development in villages/towns, which is essential for growth of the country. This is not a quick remedy budget but the initiatives announced, if executed and implemented effectively, should lay a strong foundation for the rural economy, which will help the country sustain GDP growth of over 7 per cent in years to come.

    It is important to understand that even if the country would achieve GDP growth of 7%, the jobs generated would not be sufficient. To solve the unemployment issue, we would have to maintain GDP growth of over 10 % on a sustained basis. Understanding this issue, the finance minister has taken a step in the right direction by emphasizing on technical education through the process of upgrading ITI institutes to world-class standards. The targeted 500 such institutes, if benchmarked to world-class standards, would provide gainful employment to our citizens not only within the country but also overseas, where requirements for technical personnel are plenty.

    Another interesting step is the increased importance given to the planning commission, which was lately sidelined, in the development process of the country. The investment in the first desalination plant in the country, the importance given to water harvesting and revival of all water bodies in the country is another good step. This natural resource is becoming scarce and we would have to look at alternate ways to preserve this critical resource.

    There is little to rejoice for the corporate sector, as corporate tax has increased due to education cess. But looking at various constraints faced by the government, maintaining status quo itself is a positive sign. The setting up of the investment commission to promote foreign direct investment and increase in FDI in civil aviation, telecom & insurance should have a beneficial impact on these sectors, which will have a direct impact on the growth of the services sector. The additional write-off towards R&D expenditure has been expanded to the auto industry. This write-off should have been allowed to all industries.

    Overall the budget has provided the right direction for laying a strong foundation for the economy. It has announced various initiatives for the poorer sections of the society. However at the same time the finance minister must reduce the fiscal deficit. Thus the right balance would have to be struck, else it could derail the economy and have an inflationary impact.

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