Krishnamurthy Subramanian says strong GST collections indicate consumption is increasing
Chief Economic Advisor Krishnamurthy Subramanian said on Monday that the aim of collecting Rs 1.75 lakh crore through disinvestments of some public sector businesses, including LIC and BPCL, is on track and that the framework for the goal is being laid.
Subramanian stated that the second wave of the Covid-19 pandemic will have less impact than the first.
The CEA stated that solid GST collections of over Rs 1 lakh crore each month for eight months in a row demonstrate that consumption is increasing up, giving a favourable signal for growth, in an interactive session organised by Federation of Telangana Chambers of Commerce and Industry.
"There has to be a lot of work which is going on and this year there is actually a lot of emphasis on achieving these targets. Remember that Rs 1.75 lakh crore, a good part of it will be from LIC's IPO (Initial PublicOffering). The second is Bharat Petroleum (BPCL) privatisation. Andthese two together itself can account for a large part of(disinvestment target)," he said.
In the current fiscal year, the Centre projected Rs 1.75 lakh crore from share sales in public sector firms and financial institutions, including two PSU banks and one insurance company.
In her budget speech, Finance Minister Nirmala Sitharaman said that the disinvestment plan would include strategic sales of IDBI Bank NSE -0.13 per cent, BPCL, Shipping Corp, Container Corporation, and Neelachal Ispat Nigam Ltd, among others, as well as legislative amendments required for the LIC IPO in 2021-22.
"I think this year very likely will be the year of which will be remembered for privatisation. We still have nine more months. I am quite confident that we will achieve the target (of Rs 1.75 lakh crore), “the CEA said replying to a query.
Earlier in his address, he stated that every rupee spent on "freebees" by governments contributes just Rs 0.98 to the economy, compared to Rs 4.50 when invested in capital investment.