Last week’s budget
announcement was considered the first test of Narendra
Modi’s reform agenda. While it wasn’t
as bold as expected, market participants hope the changes were
enough new foreign investors’ interest in India.
Modi's first budget avoids radical changes
The budget was expected to clarify the Modi
administration’s views on retrospective taxation,
the unpopular General Anti-Avoidance Rules (Gaar), and capital market products such as
depositary receipts and real-estate investment trusts
It acknowledged most of these issues, but its
response was less dramatic than some had hoped.
The budget did not make radical changes, said
Latham & Watkins partner Rajiv Gupta. "It’s
still early days for the new government, and they probably
didn’t want to introduce radical changes that may
have a disruptive impact," he said.
Instead, he believes that they are taking incremental steps
to lay the foundation for next year, when...