, India

Here are India's 4 new measures to boost growth

Diesel prices will be hiked to cap fuel subsidy woes.

According to Morgan Stanley, the government announced new policy measures.

Here's more from Morgan Stanley:

In the last few days, the government has announced its decision to (a) cut fuel subsidy burden by increasing diesel prices and capping subsidy for cooking gas; (b) open up foreign direct investment in multi-brand retail, aviation, broadcasting and electricity exchanges; (c) implement the plan for the divestment program mentioned in the budget; and (d) encourage state-owned enterprises to use their cash surplus to accelerate investment spending.

Reducing probability of our bear case 2013 GDP growth estimate:

In our base case esimate, we had assumed that the government would initiate policy measures to contain the fiscal deficit and arrest the decline in private investment. However, we had seen high risk of no major policy action, with our bear case probability at 35% and GDP growth estimate of 4.3% for F2013.

With the announced set of new policy measures, we are raising the probability of our base case forecast to 70% and reducing the bear probability to 15% - indicating greater confidence in our base case estimates.

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