By Tamanna Inamdar
Air India, BPCL, Concor and BML disinvestment should be done with due process in the new financial year, says Amitabh Kant, CEO, NITI Aayog.
Has this Budget really delivered what was expected? It was supposed to be a never seen before Budget. Has it been or done enough to rev up the engines in a post pandemic year?
First and foremost, this is a Budget which does not look at merely accelerating growth for this year. This is not a Budget for this financial year but it is actually a Budget for the next four to five years because it lays down the key principles within which the government will operate and that continues the process of disinvestment. It lays a huge focus on monetisation. It talks about opening up FDI in insurance. It talks about banks and insurance companies getting privatised and therefore it lays a very clear trajectory.
Secondly, it does not distort anything and in a Covid year, the budget is not doing anything damaging. It is a very pragmatic, very practical and very rational Budget because it does not put in additional cesses, additional taxes and brings sensibility to the Budget making process.
Thirdly, on the tax side, by doing away with antidumping duties and distortions on raw material and intermediate goods prices, it will make raw material and intermediates extremely cheap and that will benefit MSMEs in a very big way and eventually end up creating employment in the country.
The biggest thing according to me is that the Budget really focuses heavily on infrastructure. The capital expenditure goes up by 34-35% but it talks at length on infrastructure and my belief is infrastructure is really the way forward. Secondly, since private sector investment is still shy of pushing out brownfield investments, privatising across rail, roads, warehouses and ports will bring in the private sector and they in turn will bring in debt. That is the best way to kickstart an accelerated growth in the coming years.
The NITI Aayog has been pushing for disinvestment. The target for this year is Rs 1.75 lakh crore, less than last yearâs Rs 2.1 lakh crore. Is it more realistic and which are the fresh names on your list?
That bit of homework will be done by NITI but broadly four strategic areas will remain. The governmentâs objective is that atomic energy, space and defence; transport and telecom; power, petroleum, coal and mining and banking and insurance and financial services are the four strategic sectors in which there should be three to four public sector companies either by amalgamating or by keeping just three or four. In all other areas, there should not be any public sector companies. So, we will get down to the business of making specific recommendations as early as possible.
We have done our homework and you will have a fairly quick roadmap from us. As you are aware, we have not been shy of this. We have made a huge number of recommendations on disinvestment and a large number of public sector companies are at a very advanced stage of disinvestment.
The problem with the disinvestment programme in India is about actually getting it done. What do you think are the systemic challenges for the disinvestment programme? The markets were zooming all of last year. Why did we not leverage that?
First, I have been discussing this with secretary DIPAM. We need to go through processes, through several committees. We are selling large companies like BPCL, Concor and Air India. If you mess up on the processes, then you get a lot of allegations and criticism on a later date and therefore it is very important to go through these processes rightly. But now that the processes have been laid down very clearly, we should accelerate the process.
Is it feasible to expect Air India to be disinvested this year considering the kind of battering the entire aviation sector has taken post Covid-19?
Yes not only Air India but also BPCL, Concor and BML. All these should be done with due process this financial year, there is no doubt about it. The target of Rs 1,70,000 crore is very much achievable and very much doable.