Last Wednesday the world got a very important news - Mr. Barack Obama
being re-elected as the president of the United States of America. However it
is such a news that would not leave even a single country in the world
unaffected. For India there were mixed feelings.
For the India IT industry this news
is considered to be somewhat bad because of the stricter visa rules that
would make it difficult for Indian IT industry to send their people to the U.S.
where lie the majority of its customers.
However if we look at the global
economic scenario this news is not bad at all. The world is well known by the
phrase "fiscal cliff" by now. Mr. Obama is believed to take a softer
stand with respect to tax reforms and reducing the fiscal spending of the U.S.
thus benefiting the growth f both the U.S. and the world economy and
hence the Indian economy as we will see more FIIs investing heavily in growing
markets like India. By December this year the decision regarding the fiscal
cliff is expected to come making things much more clear.
On the other hand India must take
care that the internal policies must not act as a hindrance to the investments.
There are several reforms which await the winter of the parliamentary session
for their approval. So there is one more reason to wait for this December.
Parth Pandya
SIMSREE Finance Forum
5 comments:
Can ne1 explain why low spending cuts in US will lead to heavy investments by FII's in India????
Aditya I think you missed the first part of the sentence. The sentence means that Mr. Obama will take a softer stand and will not reduce fiscal spending.
Good article, short and simple to understand. For those who dont have an idea on 'fiscal cliff' ,please refer the following links-
http://www.forbes.com/sites/rickungar/2012/11/10/the-fiscal-cliff-explained/
http://www.usnews.com/news/articles/2012/11/08/an-extremely-simple-explanation-of-the-fiscal-cliff
How does Mr. Obama taking softer stand on spending cuts affect FII's investing heavily in India..sry but i did not get that...i would like it if you could elaborate on this matter!!
Hi Aditya, Mr.Obama might not introduce new taxes or reduce the tax cuts to reduce their fiscal deficit and hence there will be more liquidity in the market so FII's can invest in emerging markets as they always do.
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