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ShareFinance minister Pranab Mukherjee spoke to the media on Tuesday during the Economic Editors' Conference in New Delhi on issues ranging from disinvestment to fiscal deficit to the 9% growth path to RBI buying gold from IMF, and much more. Mukherjee claimed it was his last policy statement before the Union Budget to be presented in 2010. Excerpts from the interaction:
On the economic stimulus exit strategy:
I'm clarifying that the government is not resorting to an exit strategy at this point. I will take a view on withdrawing the stimulus package when I'm convinced that the economy has come out of a situation and is on a firm growth path. It would be wrong to say that after studying the Q2 and Q3 financial results of companies, the government would take a decision to withdraw the stimulus package.
On whether the goods and services tax (GST) is on track:
We are working on it. Twenty-eight states are involved in it. There has to be convergence of views between them for a full GST. We are trying to stick to the schedule. On November 10, we have a meeting with the state finance ministers on its implementation.
On review of the recent press notes issued by the Department of Industrial Policy and Promotion (DIPP) on FDI calculation:
We (the finance ministry) are in touch with them (DIPP). If required, we'll issue a clarification on the matter.
On whether the 3G (third generation) telecom auction was expected this financial year, in the context of the concerns raised by the Department of Telecom (DoT) on spectrum vacation by the defence ministry:
I have received some information and am aware of certain areas of differences on vacation of spectrum. A memorandum of understanding (MoU) was earlier entered into by DoT and the defence ministry on spectrum vacation. I hope a decision will be taken in the letter and spirit of the MoU. As for the auction timing, the administrative ministry -- DoT -- will have to take a call. I expect DoT will act as per the advice of the group of ministers (GoM) (that was constituted to sort out the spectrum issue).
On the significance of RBI buying gold from the International Monetary Fund. Is it over-confidence in gold or lack of confidence in the dollar?
It does not signify either. I would like to draw your attention to some years ago when the sentiment of the country was outraged over the news that RBI had pledged gold with the Bank of England to raise resources. My advice to the RBI governor would be, buy forex.
On whether weakness of the dollar would be discussed during the forthcoming finance ministers' G-20 meeting:
Normally, we don't discuss such issues. The meeting will be a follow-up of the Pittsburgh summit that we attended. Besides the economic meltdown and revival, climate change financing will also be discussed.
On whether the winter session of Parliament would take up the finance sector bills:
Some of the bills which were introduced in the 14th Lok Sabha have lapsed. Some others have not. Depending on the urgency, the bills would be taken up.
On how much the government expects from disinvestments this year, and the utilisation of proceeds:
I can't talk about the quantum that we expect from disinvestment of public sector enterprises. There is no fixed target. Also, it's not proper for me to talk about it. As for utilidation of the proceeds, the existing arrangement is through the National Investment Fund (NIF).
On the enterprises identified for disinvestment:
I'm not going to prepare a list and read it out. We will keep a watch on the market and when we get maximum dividend, we will go ahead and identify the enterprises to disinvest.
On when India can get back to the 9% growth path:
It will depend on the pace of recovery of the world economy. Other domestic factors (like impact of abnormal south west monsoon) will also play a role. I can't predict the exact timeframe. It may take a year or little more than that.
On the steps that'll be taken to return to the 9% growth track:
The busy season has started, but there are some areas of concern. Our steps and corrective measures will depend on many factors. These include pick-up in manufacturing activity, exports, assessment of the impact of the abnormal south-west monsoon and Rabi sowing. Fiscal correction will take some time.
