Calling the sale of heavily indebted national airline Air India to Tata Sons a “watershed moment,” Finance Ministry Senior Economic Advisor (PEA) Sanjeev Sanyal said the government had succeeded in carrying out a sweeping privatization. clean and popular. Expressing optimism about India’s economic recovery, Sanyal expects gross domestic product to show double-digit growth in the current fiscal year and in the following year 2022-2023.
“It had to be shown that a big privatization could be done, that it could be done properly and that it would be a popular decision,” Sanyal said on Day 2 of the 19th edition of the India Today Conclave 2021. Okay, the PEA said the plaintiffs should have formed a consortium and bid for the airline.
“If anyone thought the Tata shouldn’t have bought it, they should have formed a consortium and bid for it, and offered over Rs 18,000 crore and we would have been very happy to sell it to them as well.” , did he declare. noted.
With the government deciding to withhold Air India’s non-core assets including land and buildings valued at Rs 14,718 crore, Sanyal said these could go through the monetization route and help pay for the debt inherited from the national carrier.
“These assets can be monetized in a number of ways. You can sell them outright where appropriate, you can rent them. [leasing] a better thing to do because after a period of time you can get it back and then you can decide what to do according to that period and so on. So that will bring in more, ”Sanyal said.
As part of the Rs 18,000 crore deal, Tata will take over a debt of Rs 15,300 crore, leaving a debt of Rs 46,262 crore to the Indian government.
Sanyal expressed confidence in the economy posting double-digit growth this fiscal year and the next. “The economy is recovering quite strongly, all the high-frequency data, whether it’s its exports or Google’s mobility index and many other indicators,… they all suggest that it is, c ‘is a very strong V-shaped recovery, ”said Sanyal.
He added that the Indian economy had survived the shock of the pandemic well. “The economy is clearly recovering, I would be surprised if we do not record double digit growth this year. This year, and maybe even next year,” he argued.
The Reserve Bank of India estimated GDP growth of 9.5 percent for fiscal year 22.
Amid the outcry over soaring gasoline and diesel prices, Sanyal justified the high fuel taxes by helping the government increase capital spending to spur growth.
“Oil prices have risen very significantly and domestic prices are very high, but there is a trade-off here between tax collection and the inflationary pressures that may exist… there is no right or wrong. wrong answer about this… where to be in this off-trade is something policymakers think a lot about… what we do in the future is different… but the good news is… we would have created a big fundraiser of income . So our tax figures are exceptionally good at the moment. Yes, and we have the resources to accelerate it, especially on infrastructure investment spending, ”Sanyal said.
Highlight the government’s reform agenda over the past 18 months. Sanyal said the government opted for supply-side reforms to revive the economy, unlike the demand-side management approach taken by other countries.
“We created the world’s largest food program with 800 million people receiving free food,…[but]… our approach was not that you can revive the economy on the basis of demand management. When you go through a shock, you need to make sure that people don’t starve, people have money in their pockets, and you don’t get cascades of defaults in the financial system, etc. So we provided the support for that. But reviving the economy must ultimately be a reform approach from the supply side, ”he said.
Sanyal added that the government has opened up so many areas in recent months. He said that through the Production Linked Incentive Program (PLI), the government is encouraging people to scale up.
“So were [doing] both in terms of opening up sectors to new sectors, as well as sectors that we have identified that probably have a high potential for scaling up, we have given a PLI program, ”he said .
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