The Centre is expected to introduce a Bill in the upcoming Winter Session of Parliament to pave the way for implementation of privatisation announcements already made in the financial sector, KV Subramanian, Chief Economic Advisor in the Finance Ministry said on Wednesday.
It maybe recalled that the government had already announced its intent to privatise two public sector banks and one state-owned general insurer.
Addressing a virtual meeting, hosted by the US India Strategic Partnership Forum (USISPF), Subramanian also said that the government, in the coming days, will continue with Capex push to help drive growth and also take steps to bring changes to its Fiscal Responsibility and Budget Management (FRBM) framework so as to lay a path of fiscal consolidation.
The changes that will be brought to FRBM will focus on ensuring that counter cyclical policies are enshrined in the fiscal policy rules. “This will be equivalent of inflation targeting on monetary policy side. Counter cyclical policies reduces macro economic uncertainty and helps investors plan better,” he said.
The second part of FRBM changes could aim at government pushing more capital expenditure than revenue expenditure and thereby act as stabilisers.
“Even though we entered pandemic in worst fiscal shape compared to our peers, we are emerging out of it better than our peers. That is important from fiscal consolidation perspective,” he added.
On economic growth, Subramanian said that he expects “high probability” of economy recording “double digit” growth this fiscal, much higher than what Bank of America has projected.
At the USISPF meeting, Kaku Nakhate, President & Country Head India, said that the Bank of America Research showed that India will continue to be the fastest growing large economy with 9.2 per cent growth this fiscal, well ahead of China which is slowing down.
“The V shaped recovery that I had predicted last year for Indian economy is very much on. I expect the latest September quarter, which is ending on Thursday, to record strong growth,” Subramanian said.
He also highlighted that India is the only country in the last 18 months that had done many structural reforms. “Every country had done demand side measures in the wake of pandemic. India is only country that has done both demand and supply side reforms,” he said.