ET: You’ve moved into the implementation mode fast. The insurance bill has already made its way to the Parliament. Would the government be able to follow the same path when it comes to privatisation of PSBs and insurance companies, where you might face political opposition?
FM: I hope to engage with all those who have reservation or hesitation on this. My privatisation is not something which is going to end up selling for closure. I’m selling for the business to continue… because I can’t run it efficiently. Secondly, I don’t have more monies of the quantity that I need, the scale I need to invest….
When I privatise, I want that activity to continue efficiently, continue with more money and that could come in from the private sector, so that is one of the principles. The second principle is that the rights of the workers, the perquisites of the workers, and all the commitments which have been made by the government for the workers… are ensured. So if these two principles are there I think I should be able to take forward the agenda.
ET : What kind of risks to recovery do you see because of the resurgence of Covid cases?
FM: I’m grateful that the prime minister has engaged with the chief ministers to say that all of us will have to work together on this to ensure that… where there is a spike, that has to be immediately addressed. There is also this planning for ramping up the vaccine being given to the citizens, both from the supply and the execution point of view. With further such efforts, we will be able to address the concerns about the spike in cases.
Sajjan Jindal: In this post-pandemic time when crude oil is going through the roof, what kind of impact it will have on inflation? Would you continue the benign interest rates regime?
FM: The petroleum ministry is keen on looking for alternative sources of crude supply. That’s not going to affect the price, but at least the supply will be sustained. But, that said, the price is something on which I’ve been open in speaking about. However, both the Centre and states will have to talk about it. I think we have to look at the consumer, and overall, again, not just the consumer, but also the ripple effect it can have on the economy itself. But whether that is going to have an immediate effect I’ll have to wait and see when the GST Council meets.
But food and food-related inflation, I think the group of ministers empowered to look at this… is meeting often and making sure that supply distortions because of any seasonal changes or because of crop patterns or because of output, are all managed well in advance We are closely monitoring that.. And on the commodities, even the core sector products, there is a lot of concern… especially when the economy is struggling to revive and this is where the demand should be consistent and business planning should not be affected. I’m sitting in consultation with a lot of people to see how best I can handle that.
SN Subrahmanyan: Can we apply our mind to see whether a better system can be found to settle disputes in infra sector across the table? How do we find an effective solution for long-term capital for financing infra projects?
FM: I don’t know whether I can get into greater details of talking about it now, but that is an area in which we are working to make sure that commercial contracts, commercial agreements are all respected, and what is it that we can do in such a situation for quick redressal through dispute mechanisms which can address such disputes as they arise.
But as far as financing for long-term infrastructure building and also for projects which are long term in nature, I think we have indicated more than one step, whether it is the forming of the DFI, we are getting it to the Parliament at the earliest. We are also giving space… for the private sector also to come into funding long-term projects.
We are engaged with a lot of sovereign funds, we are also talking to globally large pension funds because they have the patience to endure long-term investment. Tax benefits have been given for many of these sovereign funds. So I think that work will set the pace for infrastructure and project financing in India.
Vibha Padalkar: What role do you see for long-term money managers like insurers and pension companies and what reforms can we expect? The way credit bureaus have helped NBFCs, banks, small finance banks really take off and grow. Can we have a repository of medical information, portability between different retirement solutions, like EPF to NPS?
There’s a benefit which I recognise on behalf of the government when engagements of such nature can happen with the industry. And I will tell you, during Covid, the Indian VC funds people kept engaging with us, telling us about the ways in which Indian money can come into investing in industry… There was a lot of sharing of thoughts. I would invite you to give me your thoughts on how best we can do this data-sharing and also on fungibility. It’s an important point on which there is a discussion happening in the government.
Amit Agarwal: How do you envision the role of a global supply chain in realising the goal of an Aatmanirbhar Bharat?
FM: Value chain is something which can make or break possible opportunities which exist, and you, who have an exposure to the global value chain spread across several countries, can tell us your experiences elsewhere, can tell us about the experience of government and commercial enterprise interface where the best practices are available, where it is a win-win for everybody.
ET: There is talk of a repeat of taper tantrum of 2013 with the rise in US bond yields. A recent S&P report says India could be more vulnerable to a taper tantrum.
FM: We’ve learnt a lot of lessons. Not just us, the Reserve Bank of India has learnt a lot of lessons, post the 2013 taper tantrum… I think we’ve had quite a few sittings, discussing with the RBI. There is a greater sync between the RBI and the government. We are keeping a good watch and I don’t think India faces the risk of repeating the taper tantrum now. We are carefully monitoring the situation.
ET: Prof Arvind Panagariya has said that the process of liberalisation has been reversed. Do you see a kind of creeping import substitution happening and the dangers of that because we followed that for the first 50 years of our independent existence?
FM: No. The import substitution and the Aatmanirbhar we are talking about is something on which all of us have spent time…The Aatmanirbhar and the import substitution is not blindly saying, “Oh, stop every import.” I want imports to come in, in the areas where they are intermediary goods, they are raw materials, something which is critical for my manufacturing to become competitive.
I’ve been selective about the items on which I have raised tariff. They are final consumer goods which are being produced in India. I have not raised the tariff on intermediary or on critical raw materials. So, it is not Aatmanirbhar of the socialist era.