India’s government has unveiled a plan to raise $30 billion in the new fiscal year by selling state-owned businesses and other public assets.
Among those assets are portions of the Life Insurance Corporation of India, various government-owned banks, and the money-losing Air India airline.
The fund-raiser is meant to help the government cut its deficit.
The plan was greeted with pessimism, in part because the government’s privatization efforts barely raised $15 billion this year.
“The new privatization and disinvestment target will be difficult for the government to meet,” said Akhil Bery, a South Asia analyst with the Eurasia Group. “Thus it will be a significant challenge” for the government “to meet this year’s fiscal deficit goals.”
In presenting the new budget, India’s finance minister admitted that current deficit reduction goals wouldn’t be met, in part because tax revenues were far below projections.
Many of India’s richest persons avoid paying taxes by spending less than 182 days in the country each year, thus earning non-resident status and escaping tax liability. The government plans to tighten rules to ensure collecting money from these traveling tycoons.
The government also is raising import fees on a range of products, including toys, kitchenware, furniture, food, and appliances.
The duties are a special blow to IKEA, the Swedish furniture retailer, which opened its first store in India in 2018 and relies on imports from China.
After the new budget was announced, India’s benchmark Sensex Index lost 2.5 percent in a special Saturday trading session, its worst one-day loss in ten years.
TREND FORECAST: Economic and social conditions will sharply deteriorate in India, its ongoing protests and strikes will escalate, and government crackdowns will intensify.
