“We should not do something routine here, and something that dies down after a few years. The policy will be very ambitious, and will happen for the first time in India,” he said.
The government is set to seek Cabinet approval for the new policy which aims to keep not more than four central public sector enterprises in strategic sectors that it will identify and open up all other sectors for privatisation.
“It will bring a paradigm change in the way we think in the government and the way we do things in the government. The implementation will also come along with it,” he added. When asked whether the banking sector would be included in the list of strategic sectors for divestment, Bajaj indicated that it was not off the table.
“The finance minister in our package one (Aatmanirbhar Bharat Abhiyaan) even if it is a strategic sector, we will have one to four in that, and the rest will be privatized. So I think the answer is there,” he said during a panel discussion.
The government was “cautiously optimistic” on the economic front but expects the economy to perform better in Q3 and Q4 compared to the second quarter, Bajaj said. The second quarter contraction of 7.5% was better than expectations, and an improvement on the contraction of 23.9% seen in the April-June quarter. International rating agencies have revised their estimates upwards after the July-September GDP estimates.
“We will continue to take all steps that are required for ensuring that the economy keeps going up from here, and we’ll see far better quarter three, quarter four, and the next year, once we come out with our Budget,” Bajaj said.
In 2021, the government’s emphasis will be on repairing the economy to bring it back to robust growth, the economic affairs secretary said, urging the private sector to take the “burden of growth” of the country and suggest steps that the government should take to support industry.
He also added that while progress was going on in setting up Development Financial Institutions for investments in infrastructure, the government will put in Rs 6000 crore in next two years in National Infrastructure Investment Fund (NIIF) via equity and another Rs 1 lakh crore through debt.
Review of Free Trade Agreements
Meanwhile, India is closely reviewing free trade agreements (FTAs) and will continue to be part of future FTAs, but will remain out of those that do not provide benefit, said Rahul Chhabra, secretary of economic affairs at ministry of external affairs.
“If it benefits national interest, we will go ahead and do it. If it doesn’t, we will move out like we did with RCEP,” he said.
India has opted out of the Regional Comprehensive Economic Partnership even as 15 other countries including China signed the regional trade agreement.
Talking of foreign direct investment (FDI), Department for Promotion of Industry and Internal Trade secretary Guruprasad Mohapatra said that the government is “very excited” and is expecting a lot of traction in the FDI, startups space.
The government is also tracking nearly 1000-odd companies internationally, through various arms to monitor movement from investment announcements to on-ground implementation in India.
“We are also on a monthly basis, hand-holding them, we are talking to them and I can tell you significant excitement is there, lot of activity is happening,” Mohapatra said.
The production-linked incentive (PLI) scheme announced by the government for 10 additional sectors will be a “game changer”, he added. “For medical devices and API, we are scrutinizing the tremendous number of applications received under the PLI scheme,’’ he said.
All ministries dealing with the recently sanctioned PLIs, will notify schemes by April next year, he added.
The government is also actively working on reducing compliance burden by introducing a single clearance window for investment proposals, which is expected to be launched by April 2021, he added.
“We are bringing all the compliances under one system, so that for investors, it is a single window— it’s a very ambitious, difficult, complex task has been initiated,” he said.
In terms of reducing the compliances for starting a business, which Mohapatra termed “cumbersome” he said that it has received the highest priority from the government.
The reforms in the segment are being reviewed at the level of the Cabinet secretary and coordinated by DPIIT, as part of the first lot, which will be done by the end of March 2021, annual inspection of businesses will be reduced.
“The renewals data has to be digitalised, all the renewals will either have to be done away with, or can be made for a longer period,” he said. “The requirement of a citizen to give multiple records will need to be addressed too and wherever the reduction is possible in this category (it will be done),” he added.
Reforms in education
Reforms in the education sector, as part of the national education policy (NEP), will also be introduced in the first half of 2021, higher education secretary Amit Khare said.
“You will see the changes in 2021 itself. Major changes include common entrance tests for admission into all central universities, the academic bank of credit, and the regulatory structure, we will be having one single higher education commission of India,” Khare said.
Khare said that just the ease of doing business, reform as part of the NEP, will bring more flexibility for both businesses and students.
Commenting on the role of the private sector, Khare said that a very important change that this policy has brought in, is to balance the regulatory structure for private and public. “Governance model should be the same and all institutions should be benchmarked on the basis of their academic performance and not on the basis of the ownership,” he said.
Khare said that digital education has taken an important place in the new policy, and there is a question of digital divide, and we are trying to address it through digital dissemination of lectures in rural areas, and innovations at the ground level.
“As far as education is concerned, we should look at the output. The entire system will be outcome based. It will be on academic standards and not on the governance models,” Khare said.