India take the slow train to the peaks

Article Abstract:

India has a large cheap and skilled labor force, and the government is committed to reducing state involvement in the market. Foreign investors have been attracted to India but growth has been erratic and there is still the problem of bureaucracy, while liberalization has made slow progress. The oldest Asian stock market is Bombay Stock Exchange, where multinationals predominate. Indian stock prices were affected by the Asian financial crisis, but no real harm has been done because the current account deficit is low and the economy is domestically oriented and controlled.

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So far, so good

Article Abstract:

India has been less affected by problems in Asian financial markets than the 'tiger' economies. The Indian economy has different characteristics, there is no current account problem, asset prices have not risen sharply, and the currency has enjoyed relative stability. There are still problems that could affect stock prices, such as political uncertainty, and slower than expected growth leading to a large fiscal deficit. Stronger growth would help stock prices and this would attract foreign investors.

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Turnaround time

Article Abstract:

Indian share prices rose as a result of the budget announced in 1997, geared to boosting growth by reducing corporate and income taxes. Many foreign brokers, including Merrill Lynch have received the budget favorably and optimists see a strong rise in coporate earnings. A strong rise in share prices is not likely to be achieved unless a number of other measures are taken such as labor law reform. There is also concern that the calculations on which the budget is based could be faulty.

Economic policy, Budget, Budgeting, Budgets

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