New Delhi: Making a strong case for privatisation of public sector undertakings (PSUs), former Vice Niti Aayog Chairman Arvind Panagariya has said that the next government should disinvest one PSU every week. He said that this is feasible since more than two-dozen PSUs already have an approval from the Cabinet.
Panagariya proposes four-pronged policy for fast growth
Panagariya proposed that the next government should show strong commitment towards fiscal consolidation, consolidate Central ministries, go for aggressive privatisation of public sector undertakings and create a new international trade negotiation entity to fast-track the economic growth of the country. “Show a strong commitment to fiscal consolidation to ensure that the private sector is not starved of investment funds,” Panagariya said.
‘Reduce the number of ministries’
The economist also said that the government should consider reducing the number of ministries to around 30 in order to make the governance structure in line with international standards and improve the efficiency of governance.
“India has more ministries than almost any other country. Most of the well-governed countries have 30 or fewer ministries whereas India has 50 plus,” he said.
“Too many ministries lead to multiple agencies with competing interests in nearly every policy issue, slowing down even impeding desirable change. Numerous sectoral ministries (steel textiles, telecom, IT, electronics, chemicals, fertilizers, mines, heavy industries, public enterprises, food processing, and MSME) also become focal points for narrowly defined industry interests,” Panagariya added.
‘Restore RBI’s Feb 12 circular or an equivalent legislation’
One of the first things that the next government should do within 100 days of assuming charge is to amend the Banking Regulation Act through an ordinance to allow the Reserve Bank of India to restore its February 12, 2018 circular or equivalent, said Panagariya. The February 12 circular was aimed at checking the creation of non-performing assets (NPAs).
“Accelerate cleaning up of NPAs and infuse capital into Public Sector Banks (PSBs) do ensure that healthy credit growth returns,” he said.
‘Sunset clause on Centrally-sponsored schemes’
“Announce the intention to introduce a sunset clause on centrally-sponsored schemes and central sector schemes and begin an audit towards that objective,” the former Niti Aayog Vice Chairman said.
“Create a new entity with charge for negotiating trade agreements and place it in the Prime Minister Office along the lines of the USTR (US Trade Representative),” he added.
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