The Hindu Business Line : RBI must exit all corporate shareholding, says Jaswant

He also stands by the Disinvestment Minister, Mr Arun Shourie's assessment that the Government has the capability of raising Rs 1,00,000 crore annually through disinvestment receipts.

In an exclusive interview to Business Line a day after the GDP figures showed a 10.4 per cent growth for the third quarter of 2003-04, the Finance Minister said that the figures were "gratifying", adding that "there's only one direction in which to go, and that is continue to move forward and further up the path of health."

On the appreciating rupee that has been causing concern among the exporting community, Mr Singh said that the consequences of the movement has to be "attended to responsibly over a time period".

According to him, the rupee's movement has to be seen in a wider context of its movement against other currencies as well.

"I, for one, would be extremely careful in assessing the rupee movement only against the dollar, because of the basket of currencies. The rupee has not seen much appreciation against the euro or the yen or the Gulf currencies through which so much of remittances come in, or even the pound sterling."

To suggest that the export sector is suffering because of the appreciation of the rupee against the dollar is "overstating the case because export figures belie this apprehension". He pointed out that exports were still growing.

Besides, he said, the relationship between the exchange rates and exports was complex.

"If you say that exports are negatively influenced because of exchange rates, then imports are influenced in the reverse direction. So we should not take a hasty step."

On the recent IDFC controversy, Mr Singh said that it was a "completely misplaced" one.

Ruling out the merger of IDFC with any other institutions, Mr Singh said that it has been decided that a consortium comprising SBI, IDFC and IDBI will manage the Rs 50,000-crore infrastructure fund while the RBI's holding in IDFC would be transferred to the Government.

"It is one of the anomalies of IDFC that 15 per cent of its shareholding is held by the RBI. When I came in, I found it truly unacceptable. The country's Central bank must not be a shareholder in any corporate body. So, all that will happen is that the Government will buy 15 per cent of the share from the RBI."

On the possibility of raising bigger amounts through disinvestment, Mr Singh was confident that the Indian capital market had the depth to absorb such amounts.

"I do think that the Indian market has the ability to absorb it (Rs 1,00,000 crore of public sector offering). This money goes into various other requirements of the nation and it will help in ultimately reducing the fiscal and revenue deficits and improve the overall health of the economy," Mr Singh said.

He also expressed confidence on the possibility of sustaining the GDP growth numbers.

"When I had earlier said and the Prime Minister had talked about eight per cent growth, it was scoffed at. Now we have reached 10.4 per cent and we are asked if it is sustainable. I do believe that it is sustainable. We will attain an eight plus percentage growth this year (2003-04) and continue on this path in the coming year," he said.