Plan panel sees bright outlook for current fiscal

Plan panel sees bright outlook for current fiscal
The Hindu Business Line, June 9, 2009, Page 15

World economic situation ‘much more favourable’ now.

–Ramesh Sharma

The Deputy Chairman, Planning Commission, Mr Montek Singh Ahluwalia, addressing a press conference in the Capital on Monday.

Our Bureau, New Delhi

The Planning Commission sees economic outlook brightening up for the current fiscal even though the country achieved only 6.7 per cent in 2008-09 which was preceded by four years of high growth.

Addressing a news conference on the first day, after he was reappointed as the Deputy Chairman by the Prime Minister last Friday, Mr Montek Singh Ahluwalia, said, “We must at least aim at the same growth rate as last year. We will do a little better, but a lot depends on how the global economy behaves in the second half of the year”.

He maintained that the current economic situation worldwide is “much more favourable” compared to three months ago, adding that “everybody expects that sharp downturn is coming to an end but people are not sure how good a rebound we are going to see in the world economy”.

Fiscal deficit

Asked about the concerns on rising fiscal deficit in the wake of two stimulus measures and an interim budget on the economy and whether the Government would revisit fiscal deficit targets, Mr Ahluwalia parried them off by pointing out that there were various other methods than direct spending, which the Government could deploy to spur growth.

He said the Government was weighing various options on what more could be done for certain sectors reeling under the impact of slowdown.

To augment investment in the infrastructure sector, he said the Government could look at relaxing norms for India Infrastructure Finance Co Ltd (IIFCL), which has raised substantial amount through tax-free bonds for re-financing infrastructure projects which were approved after March 31. He said that “we are at a stage where we can invite bids for big infrastructure projects”.

Disinvestment

On disinvestment, he said the Government could look at disinvestment in public sector undertakings as a rational way of mobilising resources. “Disinvestment is a rational proposal. There is a lot of scope to raise resources through disinvestment. There should be no objection if the Government brings down its stake to 51 per cent in PSUs”.

To a query on any further stimulus measures to stoke demand and revive activity across the real sectors of the economy, Mr Ahluwalia refused to comment as the budget preparation is under way in the Finance Ministry. “We are in discussion with the Finance Ministry about the appropriate size of the planned expenditure for this fiscal and how much we can do with regard to what is tolerable fiscal deficit level.”

Fuel prices

On deregulation of fuel prices, Mr Ahluwalia said that he has not seen any proposal from the Government so far but said that while the policy should favour domestic prices to get aligned with international crude prices progressively, the domestic users of kerosene should be subsidised.

He said the unique identity cards to be issued to citizens would be eventually converted into smart cards to those people below the poverty line and other welfare programme beneficiaries to ensure targeted use of such subsidies to avoid wastage of precious resources.

On the consolidation of flagship programmes of the UPA Government as outlined in the President’s address to Parliament, Mr Ahluwalia said that this is needed not only to get benefits to the intended people as also to avert overlapping of programmes to ensure efficiency of resources use.