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Exuding confidence that the Government will “walk the talk” on privatisation, Chief Economic Advisor (CEA) to the Finance Ministry Krishnamurthy Subramanian on Saturday said the disinvestment target of ₹1.75 lakh crore for 2021-22 is “eminently achievable”.
The CEA said the target for the new fiscal is actually a carry over from estimates of last fiscal, which includes the privatisation of BPCL and listing of Life Insurance Corporation of India.
“The BPCL privatisation will easily fetch ₹75,000 crore to ₹80,000 crore while the LIC listing will raise about Rs 1 lakh crore,” he said at the third anniversary event of Jana Small Finance Bank, adding that work had begun on these in the current fiscal and will be completed in the new fiscal.
Stressing that there has been a change in economic thinking, he said that private sector is a key part of this.
Growth
Meanwhile, Subramanian also expressed confidence that India’s economic growth will go back to the 7 to 7.5 per cent trajectory in coming years with higher gross fixed capital formation and productivity measures bearing fruit.
While it is estimated that GDP growth will be in double digits in 2021-22, the CEA said he is optimistic that from 2022-23, the economy will expand at about 6 per cent to 6.5 per cent and hit the upward trend and go to 7 per cent to 7.5 per cent.
“I don’t foresee the possibility of stagflation,” he stressed.
Inflation targetting
When asked about his views on inflation targeting, the CEA said, “Overall inflation targeting has helped in bringing the volatility of inflation and level of inflation down. But what is important to keep in mind is that where there are supply side factors that cause inflation, a lot of it is coming from the food economy. That is something we need to be careful about as monetary policy can primarily influences demand and it ideally, should not be responding as much on supply side forces.”
He also said that the country needs a lot more banks, pointing out that in the United States (US), which has one third of India’s population, there are about 25,000 to 30,000 banks.
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