[People close to the party and economists say the
front-runner for the post of finance minister, who will also be tasked with
restoring foreign investors’ confidence in India Punjab ,
previously served as the minister of commerce and industry and the minister of
law and justice in the B.J.P.- led National Democratic Alliance government,
which governed from 1998 to 2004.]
By Neha Thirani Bagri
 |
Prakash
Singh/Agence France-Presse — Getty Images
Arun Jaitley, a senior leader of the Bharatiya Janata Party, arriving at the Parliament house
in
|
INDIA VOTES
News and analysis on the world’s
largest election.
Domestic
and foreign investors and businesses are also waiting on the announcement of
the new government’s first budget, while keeping tabs on speculation about a
possible change in leadership at the central bank.
People
close to the party and economists say the front-runner for the post of finance
minister, who will also be tasked with restoring foreign investors’ confidence
in India Punjab ,
previously served as the minister of commerce and industry and the minister of
law and justice in the B.J.P.- led National Democratic Alliance government,
which governed from 1998 to 2004.
In
February, Mr. Jaitley remarked, rather
tellingly, that the current finance minister, P. Chidambaram, would leave a
troubling legacy for his successor.
Another
contender whose name is making the rounds is Arun Shourie, a senior
B.J.P. politician and former minister of disinvestment, communications and
information technology in the National Democratic Alliance government. He has
also worked as an economist at the World Bank.
People with
knowledge of the matter have suggested that a technocrat and party
outsider like Deepak Parekh, chairman of HDFC Bank, or K.V. Kamath,
chairman of ICICI Bank, could be named finance minister.
“If Mr.
Modi chooses a pro-reform technocrat from outside the political system who
knows the financial market or is from the financial market, such as Deepak
Parekh, the markets would see this as a positive move,” said Sujan Hajra,
chief economist and executive director of institutional equity at AnandRathi
Financial Services in Mumbai.
“But given
the kind of majority the B.J.P. has got, and the kind of control Mr. Narendra
Modi would like to exercise on the Finance Ministry, it is more likely that a
politician will be chosen for this post,” he said.
Mr. Hajra
added that given Mr. Modi’s business-friendly reputation, he is expected to
work closely with the Finance Ministry in deciding the course of India
The
announcement of the new government’s first budget, its economic road map, is
the next big inflection point for the market and is expected by July.
“Judging
from the anticipation in the markets since the exit poll results, for the
budget the expectations will run sky high,” said Dilip Bhat, joint managing
director of Prabhudas Lilladher, a Mumbai-based brokerage. “There are some
immediate actions which the market is looking forward to, such as the
announcement of pending road projects, that would create a multiplier effect in
terms of jobs and incomes for workers across geographies.”
He added
that he expected that public sector undertakings would be given greater
independence to chart their own course of action and that some measures would
be announced to get stalled infrastructure projects off the ground.
Analysts
expect the new government’s budget to differ from those of the Congress-led
government in that it will focus on encouraging investment over consumption, by
reining in subsidies and stepping up infrastructure and investment projects.
Many expect the government to announce a revamping of the tax structure,
something investors have been eagerly awaiting.
“Mr. Modi
needs to put in place a framework to stimulate demand in the economy, and
simultaneously spur private investment,” said Rahul Arora, the chief executive
for institutional equities at Nirmal Bang Securities, a
brokerage based in Mumbai. “The markets are waiting for his views on a taxation
overhaul, the implementation of the goods and services tax and a timeline on
the Direct Taxes Code.”
He
predicted that the current rally in the Indian stock markets, which have jumped
since Mr. Modi and his party won a solid majority in the lower house of
Parliament, could be sustained until the budget is revealed, and that the
budget could fuel an even longer rally if it meets investor expectations.
One
possible action that could lead to a correction or drop in the stock market is
a change in leadership at the country’s central bank. Raghuram Rajan, who was
appointed governor of the Reserve Bank of India
However,
since he has taken over, he has raised the benchmark repo rate, the rate at
which the central bank lends to banks, three times — by a total of 0.75
percentage point to reach 8 percent — to tackle inflation, a problem that has
long dogged India.
Such moves
have been criticized by members of the B.J.P., including Piyush Goyal, national
treasurer for the party, who said, “I think
Governor Rajan is only aggravating the problems and making it worse by
increasing interest rates.” He added that the B.J.P. would combat inflation by
increasing investment and accelerating economic growth.
There has
been widespread speculation about
the possibility of Mr. Rajan’s dismissal by a B.J.P.-led government, though he
has denied any rift with the party. Mr. Jaitley has
criticized the use of interest rates to curtail inflation but has been quiet on the subject of Mr. Rajan’s dismissal.
“If someone
is doing a good job, he will certainly continue,” he said in
a television interview.
Because Mr.
Rajan has been viewed favorably by both domestic and foreign investors,
analysts said a change in leadership at the central bank would be
counterproductive. Mr. Parekh of HDFC Bank toldThe Economic Times this month that
replacing Mr. Rajan at the helm of the central bank could lead to a downgrade
in India
“The
removal of Mr. Rajan would not be a positive signal to investors,” said Leif
Lybecker Eskesen, chief economist for India Southeast
Asia at HSBC Global Research in
Singapore
Besides, he
said, the low levels of investment in India
The post of
Reserve Bank governor has traditionally been treated as independent by
governments, and economists predicted that the government would not remove Mr.
Rajan so early in his tenure.
“I would
find it very difficult for a new government to replace a popular and an
effective governor especially so early at the job,” said Tushar Poddar, chief India
*
Former Italian leader defends his relationship
with German chancellor on Newsnight and says scandal claims are lies
By Haroon
Siddique
With less than a month remaining in
his role as Newsnight's rottweiler-in-chief, Jeremy Paxman has added another high-profile
scalp to his legacy of
public-figure grillings.
Demonstrating that his decision to leave the programme after 25 years has not doused any of the fire in his notoriously combative interview technique, he rendered the former Italian prime minister, Silvio Berlusconi, temporarily speechless after asking him: "Do you have a particular problem with Angela Merkel? Is it true you called her an unf***kable lard-arse?"
The question, which followed a
series of innocuous warm-up questions posed to the scandal-ridden former
Italian leader about the EU and the euro, appeared to leave him momentarily
stunned as an interpreter relayed it to him through an earpiece. When he
recovered his composure, he said that he had never insulted anyone in 20 years
of politics and that the alleged insult was "made up by someone who wanted
to turn Angela Merkel against me". Warming to the theme, an amused-looking
Paxman also asked Berlusconi if the incident when he jumped out from behind a
monument and said "cuckoo" to the German chancellor "was just a joke".
The former Italian leader, who was forced to resign in
November 2011 after
losing his parliamentary majority, insisted that far from being an insult, it
was testament to his close relationship with Merkel. "She enjoyed
it," he replied. "I explained why I did the cuckoo thing. A few days
earlier I had been to St
Petersburg to visit [Vladimir ] Putin. Putin hid behind a pillar and did cuckoo to me
from behind. Merkel and I were on really good terms so when she came to Trieste , I thought of what Putin had done and I basically hid
behind a monument and did the same thing. It was funny."
The 77-year-old billionaire's time in office was blighted by a
succession of scandals, leading Paxman to say that it was "unfortunate
that as far as much of the rest of the world is concerned, the reputation you
have is all about your private life. It's about corruption and unpaid taxes and
bunga bunga parties".
Berlusconi responded that 46 out of 47 cases against him were dismissed,
and that "lies" were responsible for his reputation abroad.
"Italians know very well that none of these facts are true," he
claimed, adding that the bunga bunga accusations – that he had sex with underage
prostitutes – were "ridiculous".
Berlusconi used the interview to
denounce Beppe Grillo, the head of Italy's anti-establishment Five Star party, comparing him to
Stalin and Pol Pot, and concluding: "I want to go down in history as a
father of the country and as my legacy, a conservative centre-right government
to protect Italy from a dictator like Grillo."
Meanwhile, Paxman has secured his own legacy of making the
likes of Berlusconi squirm. The interview is likely to be filed alongside other
memorable moments such as when he asked Michael Howard the same question
a dozen times and questioned Tony Blair as to whether
he and the US
president, George W Bush, prayed together.
@ The Guardian
@ The Guardian
