The Budget is in the right direction and aims to push economic growth by containing fiscal deficit and inflation. Opening up of FDI in a few sectors will boost job creation. We expect short to mid-term job creation in the insurance sector and long-term job creation in infrastructure and manufacturing sectors. The Micro Small and Medium Enterprises (MSME) sector will see momentum on the back of the Rs 10,000 crore venture capital funds. It has the potential to be a key job creator in the long term. The creation of Skill Development Academy will make the 10 million to 12 million entering the job market employable. Lack of opportunities and access to proper training and facilities have led to a widening of the skill gap in India. The move to set up IITs, IIMs and medical colleges is a major boost to the education sector. These institutes will be able to attract good faculty members due to the brand and higher salaries they pay. It is also an good initiative for students too. We need not right away about jobs for them as it will be a few years before they graduate. Hopefully, the economy will have much more to offer by then.Moorthy K Uppaluri is CEO, Randstad India.
Jaitley in his budget speech said manufacturing units will be allowed to sell products through retail channels, including e-commerce platforms, without any additional approvals. India allows 100 percent foreign investment in manufacturing barring a few areas such as defence.
It proposed allowing foreign retailers, who manufacture products in the country, to sell via e-commerce platforms, a step towards liberalising foreign investment in the country’s $13 billion e-commerce sector.
Reuters Market Eye – Shares of real estate developers gain on finance minister Arun Jaitley’s plan to provide incentives for the establishment of real estate investment trusts.
DLF Ltd (DLF.NS) gains 9 percent, Prestige Estates Projects (PREG.NS) rises 6.3 percent, Indiabulls Real Estate (INRL.NS) is up 5 percent while Housing Development and Infrastructure Ltd (HDIL.NS) advances 5.4 percent.
India boosted defence spending by 12 percent in 2014-15 over the previous year in the budget. Finance Minister Arun Jaitley set the military budget at 2.29 trillion Indian rupees ($38.35 billion) for 2014-15, 50 billion rupees more than what the previous government agreed in an interim budget earlier this year. It further opened the domestic weapons industry to foreign investment to help rebuild the military and narrow the gap with China.India has been the world’s top arms buyer for the last three years, trying to replace an ageing Soviet-era military with modern weapons as a deterrent to a rising China, with which it fought a war more than half a century ago.