Union Budget 2019: In her maiden Union Budget speech in Parliament, Union Finance Minister Nirmala Sitharaman said that ‘gaon, gareeb aur kisan’ will be focal point of Modi Government 2.0’s flagship programmes. With an eye on bossting the investment in stagnant economy, Sitharaman said that, “Further opening up of FDI in aviation, media, animation AVGC and insurance to be examined, in consultation with stakeholders; 100% FDI to be permitted for insurance intermediaries.” Sitharaman in her Budget speech said that India's FDI inflows in 2018-19 grew by 6 per cent to $64.37 billion.
A day before the Economic Survey had also spoken about new FDI plan. The government is expected to further ease the foreign direct investment (FDI) norms with a view to bridge the widening current account deficit (CAD), the Economic Survey 2018-19 had said. "Government policies are expected to further lift restrictions on FDI inflows, which will continue to increase the stability of sources funding the current account deficit," the survey, tabled in the parliament Thursday.
It said that from a macro-economic perspective, the deterioration of CAD may be contained if consumption slows in the economy while increase in investment and exports become the new drivers of the Indian economy. The deficit increased to USD 57.2 billion or 2.1 per cent of gross domestic product (GDP) in 2018-19 as against 1.8 per cent in the previous year.
The CAD, which is the net of foreign exchange inflows and outflows, had stood at USD 48.7 billion in 2017-18. It said the widening of CAD has been driven by a deterioration of trade deficit from 6 per cent of GDP to 6.7 per cent across the two years. Rise in crude prices in the fourth quarter of 2018-19 and a decline in the growth of merchandise exports have led to the deterioration of trade deficit, it added.