Budget 2012
Annual Union Budget is seen as window of opportunity for investors to have the Government roll out the investor friendly measures, be it policy transparency, rates or road map for industry regulations.
Oil and Gas industry fuels the economy to the extent of over 40% of primary energy. Low domestic production, low legacy prices, government say on pricing, absence of true competition in petroleum marketing, developing downstream regulations, import of exploration services and competitive refining industry characterise Indian Oil & Gas Sector. From Energy Security stand point, investments in the sector are an imperative. The investors expect the business, fiscal, and regulatory and policy environment to improve for it to be a perfect country to invest in on the back of robust and growing demand.
It’s one thing for the ruling United Progressive Alliance (UPA), which is led by the Congress, to admit its policies centred around handouts and higher rural wages have failed. It’s quite another to try and push for higher taxes and transparency in the face of an energised opposition and squabbling coalition.
Still, several analysts reckoned the Congress leadership will see the writing on the wall, leaving it little choice.
“It’s time for Congress to perform or perish,” said Arun Kejriwal, strategist at Mumbai-based advisory firm KRIS, arguing for the government to put in place policies that may encourage business and create more jobs for voters.
At present, foreign individuals are permitted to invest in Indian corporate bonds only as a sub-account of a foreign institutional investor (FII), which in turn has to apply to Sebi on their behalf. Direct investment will make the process simpler and less expensive as investors will just have to open an account with a depository participant and place orders.
The government on January 1 this year allowed foreign individual investors, pension funds and trusts to directly invest in equities, a move that was followed by a market rally that seems to have caught many participants by surprise. The benchmark BSE Sensex has risen 17.4% so far this year, after falling 25% in 2011.
