Modi reform push lifts India economic outlook 21/10/2014

Modi reform push lifts India economic outlook
21/10/2014 12:40
The Modi government means business as it steps up its big-bang reform agenda in a bid to bolster growth in Asia’s third biggest economy which has rebounded into the 5 per cent plus growth category.
Over the weekend, the cabinet freed diesel prices from government control, a move which may go a long way in reducing the oil subsidy burden and taming the long-standing problem of high fiscal deficit creating more policy easing room for the RBI.
The cabinet also raised the cost of natural gas from the current USD 4.20 per mmBtu to USD 5.61 per mmBtu, effective from November 1, with prices to be revised half-yearly. The revised gas pricing formula is expected to provide drilling and investment incentive to gas producers, while taking consumers’ interests into consideration.
In a bid to woo foreign investment, Modi raised the cap on FDI in sectors such as defence and railways while his ambitious ‘Make in India’ campaign seeks to make the country a leading global manufacturing base by easing norms of doing business in India by slashing red tape and overhauling redundant labour laws.
Modi has also decided to open up the state-run coal sector to private players, a major liberalisation move for the sector. The government is planning to auction all 204 coal blocks that are operating or non-operating, to end-users in power, cement and steel sector.