Narendra Modi’s Long Game ! ! !

Narendra Modi’s Long Game ! ! !

Markets, News 0 Comment 1

Here’s what I think is happening: there is a larger plan by Modi government at play. India may align financial year with calendar year.

Currently, the financial year—for government as well as for most companies operating in India— is April 1 to March 31 of the following year. The government wants to align this to global practice of January 1 to December 31.

A seemingly straight forward step at adopting a global benchmark? Well not really. As anyone close to Modi will tell you, that things that appear to be a straight slam dunk case with him usually aren’t.

This could have far reaching implications not just economically but even politically. So if the government would shift to calendar year from financial year: that would mean budget dates too will have to be changed. So instead of February governments will have to present budgets in November. But why? Read on.

Modi government may make this shift in such a way that the next budget would be in November 2018. That would mean the government would get a period of about 20 months—instead of 12—between two budgets.

That could perhaps be all the time the government may require to gauge political and economic situation and plan for policies before the 2019 elections. And because the November 2018 budget would just be before general elections—that can be altered to suit political realities.

In November, the government may come up with all the populist measures with a hope of impressing the voters.

One may ask why go through such a lengthy exercise? Why not announce populist measures in February 2019 budget directly?

The government has introduced a lot of changes in last two years, whether good or bad is a different debate though, that have impacted people. From demonetisation to GST and from black money crackdown to infrastructure push everything will have some aftereffects. Add to that global uncertainties and domestic realities including state elections.

The government would get more than a year to adjust to new realities. Like if GST comes in to play by June 2017 it will have more than 18-20 months before general elections are announced. Similarly, government can decide their economic policies and sops to be announced in the budget just before the elections, based on political realities existing at that time.

So whether you thought Budget 2017 was a big bang one or a damp squid; it might still end up as being one of the last of its kind.

[Source: http://economictimes.indiatimes.com/news/economy/policy/narendra-modis-long-game-why-budget-2017-may-be-last-of-its-kind/articleshow/56918246.cms]

Author

Leave a comment

You must be logged in to post a comment.

Back to Top