‘Time ripe to accelerate privatisation journey’

We should certainly move faster on the privatisation plans. But to be fair to the government, the last one year may not have been the best time to sell assets because of multiple concerns. We obviously have to time that because you have to get the best value for the seller. This may be a good year to start doing that (privatisation) simply because there is buoyancy and a view that the world will recover faster than we had feared last year, this time. This may be a good time for us to start accelerating this journey.

Executing your plans will give you a lot more credibility than announcing more and more plans. There is enough on the table and if we can execute that... that itself will attract interest and investors for subsequent rounds of privatisation that the government may want to do.

The concern we had two weeks back was whether the rural economy had been more severely hit by the second wave than the first. Our economic recovery in July last year was led by rural economy, and then the auto industry started picking up by September or October. What we have seen over the last week or 10 days is that the rural economy is not as badly impacted as we feared, which augurs well. If there are good monsoons and agriculture grows at 3.5-3.6 per cent, as last year, we are on track for a good recovery.

Time-bound resolution is the key. Dragging on the process too long encourages uncertainty for bidders. IBC was something that had to be done because of the criticisms that assets once stranded were unproductive. These were investments made on the ground and, for whatever reason, they were not being productive.

If you have an asset on your book, and you have not recognised what you will get for it, you will call it a haircut. But looking at the asset as if nothing is wrong is basically not accepting reality. What is important is that banks have got cash in hand, whereas earlier, they were struggling to get interest on the loans that they had given. These assets are now being productively used and the banking system is lending to those assets again in a healthier way. It is a correction that had to happen. Everyone knew that there were NPAs; some of them are getting flushed out of the system and moving into productive hands.

If you look at our trade performance, rising global oil prices are a headwind. The fact that the US is expected to come to the pre-pandemic level in 18 months, China being already at the pre-pandemic level and Europe responding more emphatically than in 2008, provides an opportunity to Indian exporters. The second opportunity in the developed world is the focus on climate change. Investments are being made on infrastructure related to climate change. There again is an opportunity for Indian exporters.

The rupee staying at this level is helpful, but exporters have concerns about rising input costs. We should also move quickly on early implementation of RoDTEP to encourage export-led investments. There will be an opportunity for India to plug into the growth of the developed world.

Last year‘s budget was quite aggressive in terms of the spending that the government had planned. Making sure all the plans translated into action on the ground is itself a good beginning. If what has been budgeted for Covid phase one and the original budget is spent, that itself will address the situation quite a bit.

At that point in time there was a concern on the fiscal deficit and whether the revenue and recovery will be strong. I think what we have seen in the last six to seven months on revenues and GST collections (consistently above ₹1 lakh crore) augurs well.

We believe there is more revenue coming to the government and hence the fiscal deficit. The fiscal deficit, which is originally estimated to be around 6.8 per cent, can go up further to 8 per cent, if this additional ₹3-lakh crore fiscal stimulus is spent. That itself will do us a lot of good.

At a very fundamental level, one concern in manufacturing today is rising input costs across the board. International commodity prices have gone up and that is reflected in inflation. Hopefully, that will settle down as supply-chains stabilise. If you really need to sustain 9.5 per cent GDP growth and hit a $5-trillion economy by 2025 or so, we need to do more to make it easier for industry to acquire land and set up facilities..

We need to have land banks and industrial estates where you can plug and play. The whole industrial park can get clearances so that each investor does not have to run around for specific clearances. There needs to be better coordination between Centre and States so that there is consistency in experience and approach. It is important for foreign investors that contractual obligations are adhered to; they want policy certainty more than anything else.