Improving ease of doing business being its top priority, the Centre will soon enter into investment
agreements with states in order for them to honour bilateral investment treaties (BITs) that New Delhi will sign with foreign countries for investment protection. States which enter into such back-to-back agreements with the Centre will be more attractive destinations for foreign investors, economic affairs secretary Shaktikanta Das tells Prasanta Sahu in an interview. Excerpts:
What is the idea behind the proposed Centre-state investment agreement?
Certain actions (like regulations promoting local industry) which are in the domain of state governments, at times get attracted under BITs, leading to disputes and arbitration. So, we want to have back-to-back agreements with states so that the states are fully on board for effective implementation of BITs. States which sign this agreement will definitely be far more attractive destinations for foreign investors. The text of the bilateral agreement with states has been prepared. It will be discussed upon by an inter-ministerial group before taking it to next stage.
When will the NIIF be operationalised?
The CEO of the National Investment and Infrastructure Fund (NIIF) will be appointed shortly. In parallel, we are in discussions with various sovereign wealth funds, pensions funds, etc. Some of them have shown interest to invest in NIIF directly while some others have shown interest in co-financing
of individual projects. I would say in the next quarter, you will see lot of action.
What will be the terms of reference (ToR) for the proposed FRBM committee?
The ToR will be made flexible enough so that the committee has complete freedom to engage with the various stakeholders and give its recommendations. It’s already 10-11 years since the Fiscal Responsibility and Budget Management Act (FRBMA) was implemented.
There has been tangible gains both at the Central and state levels. So, the time has come to review it: whether we can have a range in terms of fiscal deficit target and whether it can be aligned with credit expansion or contraction.
When will the monetary policy committee (MPC) be set up?
The MPC selection committee will meet shortly to decide on modalities and procedure for selection of
candidates. The MPC should be in place by September.
Are you planning any changes to the gold monetisation scheme?
There is some issue relating to tripartite agreement to be signed between the banks, refiners and the collections and testing centres. Some of the banks are asking for very high guarantees from the collections and testing centres, which are receiving gold on behalf of banks and will be in the custody of gold during the transit period. We have asked the banks to review that based on client relationship.
When do you think GST will be implemented?
The endeavour is now to pass the GST Constitution Amendment Bill in the monsoon session. If it gets passed, we are definitely looking at its implementation from April 1, 2017.