Strong foundation of Indian economy
Chief Economic Adviser KV Subramaniam said that the tapering of monetary incentives by the US Federal Reserve will not affect India much. He said that the foundation of the country’s economy is strong. Many economists have expressed concern that emerging markets may not withstand a repeat of the ‘taper tantrum’ of 2013.
Addressing the annual international G20 conference organized by ICRIER, Subramaniam said that the foundation of India’s economy is stronger than during the time of global financial crisis. He said, in such a situation, I believe that it may have some impact in the short term, but overall the Indian economy will not be affected much due to reduction in bond purchase programme.
In 2013, capital inflows from emerging markets began to rise after the US central bank broke down on quantitative stimulus measures as part of monetary policy, and there was a spike in inflation. This is called the tamper tantrum.
disinvestment target will be achieved
On the disinvestment front, Subramaniam said this year will be different from the previous years. The government has not been able to achieve the disinvestment target for the last three financial years, raising questions on the estimated Rs 1.75 lakh crore target for the current fiscal.
So far this financial year, Rs 9,110 crore has been raised through minority stake sale in PSUs and SUUTI stake sale in Axis Bank.
Air India will soon be disinvested
Subramaniam said that Air India will soon be disinvested. For this, measures will also be announced for the privatization of two public sector banks.
On the health and financial sector, Subramaniam said that the banking sector is now profitable and the non-performing assets (NPAs) have come down as compared to the pre-Covid situation. Therefore, the banking sector appears to be in a better position and this is important as the slowdown even before the pandemic was mainly due to the financial sector.