‘Some moderation in outlay for infrastructure can be expected’
tary has clarified plans to list sovereign bonds on global indices. The government has done a lot for the poor and for industry by providing liquidity. But middle class is feeling the pinch. It needs support. We will go all out on reforms. We will also sign trade agreements.
Joshi: The government came out with a scrappage policy a few years ago, but not much has happened since. This is the time to implement it. It will lead to scrapping of 6,00,000 commercial vehicles over the next two-three years and generate demand. It will give a push to the auto sector and the economy. The housing sector is beginning to pick up because of reduced stamp duty. It is time to enhance income tax deduction limits on home loans.
BT: And where will the resources come from? Akhil Gupta: While the FM has said that she will place growth before fiscal deficit, I expect that some balancing will be kept in mind. Accordingly, some moderation in outlay for infrastructure projects should be expected. Even with muted public expenditure, fiscal deficit will be large. Since it will be impractical to increase taxes in view of the state of the economy and requirement to push growth, the government will have to resort to more borrowings.
The two obvious areas for the government to spur growth would be investment in infrastructure and stimulus by way of subsidies and direct transfers to economically weaker sections. I feel one area where the government can take active steps to spur growth while containing fiscal deficit is encouraging private sector investment in infrastructure projects by providing sovereign guarantees to lenders till the critical stage of the project is achieved.
Nilesh: There are enough opportunities to raise resources. We can think about a gold amnesty scheme. There is more than $2 trillion worth of gold in India, but most of it is in tijori as black economy. If we structure the scheme appropriately and execute it with military precision, just 10 per cent of gold stock in India will mean about $200 billion in resources. A 25 per cent tax rate means $50 billion in taxes and $150 billion equity capital.
Second, we need to realise better value for our PSUs. In January 2008, the BSE PSU Index was at 11,205 and the Sensex was at 21,000. Today, after 12 years, the Sensex is up 2.25 times to 47,000, but the PSU Index is down 48 per cent to 5,900. All PSUs trade at below book value. PSUs can be
Review existing FTAs; boost bilateral, trilateral trade
Resume stalled mining projects
Mukesh Butani,