India's budget needs to bring focus back on growth

COMING right after India's major outreach to Asean during its Republic Day celebrations last week, the country's Feb 1 budget - to be presented by Finance Minister Arun Jaitley - will be followed with interest. Asean nations are keen to forge closer economic ties with India, and investors will look for clues in the budget proposals.

The budget will be tabled against the backdrop of what could be described as a year of structural changes in 2017. The first part of the year was spent recovering from the decision in November 2016 to withdraw high-value notes from circulation. The move effectively wiped out 85 per cent of the monetary value of money in circulation in India, which is one of the highest cash-dependent economies in the world. Predictably, this caused a major disruption in economic growth.

In July, the long-awaited goods and services tax (GST) - which finally made India one country in terms of taxation - was rolled out. Initial glitches in the implementation caused another set of disruptions and a steep fall in indirect tax collections.