FDI Reforms: Policy Paralysis End, But Results Awaited

Will the Economy Get Boosted?

It is believed that there will not be any immediate change for the economy of the country as well; since the recently announced reforms do not have a significant bearing on the country’s inflation, low investment, industrial stagnation and declining corporate profits. The Firstpost.com reports that though the higher diesel prices will surely improve the fiscal deficit, it has to be followed up with similar effective actions in line. FDI in retail or airlines will work only over a period of time.

With the policy reforms announced by the government, however, the exchange rate may become steady, as the dollar is getting weaker day by day.

Among these, the disinvestment announcement is rather big and it is expected that the target of the year will be achieved soon, which will keep the stock market alive. It will hold for the reduction of withholding tax on interest on foreign loans. But they also are not expected to add to immediate GDP or lower inflation.