Noted Indian-American economist and former Vice-Chairman of Niti Aayog believes that the new government should approach privatisation of PSUs. In fact, he suggests privatisation of one PSU every week.
Panagriya, an Indian- American economist served as the first vice-Chairman of Niti Aayog, an entity which replaced the planning commission. The economist was asked the priorities from the new government and the PTI reported his thoughts.
The number of PSUs in India has increased since 1951 from a mere five to 246 in 1991. By the mid of fiscal year 2017, India was home to 8 Maharatnas, 16 Navaratnas, 74 miniratnas and 300 CPSEs (Central and Public Sector enterprises).
While privatising one PSU every week may appear aggressive, Panagriya believes it was feasible because over two-dozen PSUs already had a cabinet approval to be privatised. Revealing an example of an entity to be privatised, he recommended the name of Air India.
The noted economist also shared his expectations from the next government. He said the next government in India should show strong commitment to fiscal consolidation, consolidate central ministries, and create a new international trade negotiation entity to fast-track economic growth in the country.
Panagriya elaborated that reducing the total number of ministries to less than 30 could help create efficiency in 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 was quoted as saying.
"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," he said.
The new government, Panagriya said, should also look to amend the Banking Regulation Act to restore the RBI's Feb 12, 2018 circular. This circular was aimed at stopping of fresh Non-performing assets.
"Accelerate cleaning up of NPAs and infuse capital into Public Sector Banks (PSBs) do ensure that healthy credit growth returns," he said.
The economist also called for reforms in labour laws, land laws, tenancy and rental laws, and creation of a new entity to be placed in the Prime Minister's office. "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)," Panagariya was quoted as saying.
Inputs from PTI.