The economy contracted by 7.5 per cent in the second quarter, as against 23.9 per cent degrowth in the first quarter of this fiscal on account of the COVID-19 pandemic.
“So we are positive. We are cautiously optimistic on the economic front. And we are hoping that our third and fourth quarter will be far better than the second quarter.
“And I may also add that not only us, but the international organisations, the rating agencies, all of them have revised their estimates upwards for the country,” he said.
On Thursday, the Asian Development Bank (ADB) upgraded its forecast for the Indian economy, projecting 8 per cent contraction in 2020-21 as compared to (-) 9 per cent estimated earlier, on the back of faster than expected recovery.
Growth will return in 2021-22, at 7.2 per cent in South Asia and 8 per cent in India, ADB said in its latest Asian Development Outlook Supplement.
Bajaj further said demand momentum continues even beyond the festive season which will push growth in the third and fourth quarters.
“We will continue to take all steps that are required for ensuring that the economy keeps going up from here, and we will see far better quarter three, quarter four and the next year,” he emphasised.
On setting up a development financial institution (DFI) for funding infrastructure projects, Bajaj said such an entity is needed.
In the months to come, there would be some good progress on that front, he said, adding the government has created a debt platform in the National Investment and Infrastructure Fund (NIIF) for which there was a Cabinet announcement.
“The Government of India is committed to give Rs 6,000 crores in the next two years…that would be leveraged with debt by NIIF and we will be putting in more than Rs 1 lakh crore into infrastructure sector on the debt side …other than the equity side.
“While DFI is in the works, we are also taking other steps to ensure that infrastructure spend happens and both debt and equity are taken care of,” he said.
Bajaj also urged the industry to come forward and invest in the economy so that there is sustainable growth.
“While the government will continue to emphasise on infrastructure spend, but unless and until we have the private sector coming and taking the burden of the growth of the country, I don’t think we can have a sustainable growth.
“So we would like to know from you (industry) as to what is it that you want the government to do so that both of us can carry this forward and 2021 we start a new decade, and that decade is the decade for India,” he said.
Govt to soon announce new PSE policy
The government will soon come out with a new public sector enterprises policy that will define strategic sectors which will not have more than four state-owned firms, Economic Affairs Secretary Tarun Bajaj said on Friday.
As part of the ‘Aatmanirbhar Bharat Abhiyan’ package, the government had in May announced that there will be a maximum of four public sector enterprises (PSEs) in the strategic sectors, and state-owned companies in other segments will eventually be privatised.
“It is going to happen very soon…the policy will be very ambitious, and more than what is anticipated…this will bring a paradigm change in the way we think in the government and the way we do things in the government and the implementation will also come along with it. So we should see a lot of action on that,” Bajaj said.
While announcing the package in May, Finance Minister Nirmala Sitharaman had said, “PSEs will continue to play an important role in defined areas. We need a coherent policy because sometimes you open up some sectors in piecemeal… Now we shall define the areas… where their presence will be impactfully felt.”