Union Budget to Tabled Post Assembly Polls

Amidst all the speculation surrounding the timing of the Union Budget, Finance Minister Pranab Mukherjee has categorically said on Monday, that it would be tabled in Parliament only after the completion of Assembly elections in five States.

He also stated that the Government had not narrowed in on any date, but the presentation of the budget would naturally be after the polls. The election scheduled to take place between January 30 and March 3 has eventually led to the postponement of the Budget for 2012-13.

According to the Election Commission, the last day of polling will happen in Goa on March 3 and as per the schedule, counting of votes will begin on March 4. In an ideal scenario, the Union Budget is presented on the last day of February every year. Mr. Pranab Mukherjee is scheduled to have intense cogitative sessions with various stakeholders during the pre budget meetings beginning January 11.

Foreign Investment in Equity Market

On a related note, Department of Economic Affairs Secretary R. Gopalan revealed that the decision to permit foreigners to invest directly in the equity market would promote long-term investments in India and drastically reduce dependence on FII hot money. “This is a very significant step. We were looking at how to increase inflows in the market. The good thing is that unlike FII money, which is deemed to be hot money, people will put money in this for a longer period of time,” he told the media gathering here.

He singled out the latest step as an important development that would create a healthy environment for Qualified Foreign Investors (QFIs) to invest in the market and be a part of it. The strategic move is aimed to counter the foreign capital outflows from the domestic equity market, which has lead to the depreciating value of the rupee.

In the middle of a volatile capital market last year, Foreign Institutional Investor (FII) outflows came up to around Rs. 2,700 crore. Such a scenario had had a bearing on the rupee, which was at an all-time low of Rs. 54.30 on December 15. On the whole, the value of the wavering Indian currency has been a sticky spot for policymakers.

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