The reform measures announced by the government in recent days may be just the beginning. The government has lined up several big-bang moves to push critical policy measures and fast-track project clearances to perk investment.
Steps on which the finance ministry has already started work include new banking licences, dissolution of SUUTI (Specialised Undertaking of UTI), expeditious clearance of 90 projects with an investment of Rs 2 lakh crore and advancement of the bank capitalisation plan. This financial year’s Budget allocation for bank capitalisation is Rs 14,588 crore.
Senior ministry officials, including economic affairs secretary Arvind Mayaram and financial services secretary D K Mittal, are holding extensive consultations with various stakeholders to expedite major policy decisions. The idea is to convince investors about India’s long-term prospects, according to officials in the know.
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The ministry has firmed up plans to exceed the disinvestment target of Rs 30,000 crore fixed for 2012-13 and decided to ensure enforcement of the mandatory public shareholding norms on both public and private sector companies. The Securities and Exchange Board of India (Sebi) has been pressing for the meeting of next year’s deadline set for companies to meet the aforesaid norms. But, with the finance ministry coming on board, the companies waiting for an extension will have to move fast.
In the case of SUUTI, the Cabinet has already approved a proposal to wind it down and shift its assets to a new asset management company. The ministry is exploring if the company can be used to hold government stakes in state-run entities. The department of disinvestment has initiated the process for stake sales through the offer-for-sale route in MMTC, NMDC, Nalco and NLC and is considering divestment in these companies in tranches, rather than in one go, to ensure good valuations.
Boosting investor sentiment is one of the government’s objectives right now and P Chidambaram on Tuesday gave enough indication of that in his first public meeting after he took over as finance minister on August 1. Sharing the dais with Sebi Chairman U K Sinha at a National Stock Exchange event on SME exchanges, the minister said given the huge number of medium, small and micro enterprises in the country, at least a few thousand of those should be listed on the country’s SME exchanges. The statement was seen as an attempt to energise the markets.
