WASHINGTON: The International Monetary Fund (IMF) on Monday said that the sales of Carrier National Air India will be “important milestones” in Indian privatization efforts.
Tata Group has emerged as a winner’s bidder for the making of Indian losses, and on October 11, the letter of intention (LOI) was issued for the group.
“We welcome the agreement recently about the sale of Indian water, which is an important milestone,” Alfred Schipke, director of the IMF-STI Regional Training Institute and the former Head of the IMF Mission India, told PTI in an interview.
Earlier this month, the government accepted an offer by Talace Pvt Ltd, Tata Group Unit, to pay the cash 2,700 crore and takeover RS ​​15,300 crore Indian air debt.
After receiving the LOI, the stock purchase agreement (SPA) for sales will be signed.
Along with Indian water, Tatas will obtain low water water carrier Express and 50 percent of India Air in the same joint venture.
“In general, to maximize the benefits of privatization, international experience highlights the importance of medium-term privatization plans, solid regulatory frameworks, competitive markets and main stakeholder purchases,” Schipke said when the IMF released an annual report of India.
Like all structural reforms during the transition, it said it was important to strengthen social safety nets to maximize the benefits and minimize adverse implications.
The annual report includes more than 130 major policy actions that have been carried out by Prime Minister Narendra Modi in the past year as part of efforts to liberalize and reform the country’s economy.
On the Fiscal Front, Schipke said it was important to highlight the two areas where the action was accommodated.
First is the expansion of rapid support for low-income households with the emergence of pandemics by effectively utilizing existing social support schemes.
Food transfer is in the form of goods through Garib Kalyan Anna Yojana PM, which has been extended several times since the pandemic, and then increasing the portability of benefits through one country the ration card system has been very important to help ease the significant impact of the pandemic about the livelihood, he said.
According to him, the second policy area is a new privatization policy of an asset monetization and pipes that can be implemented, if successfully implemented, increasing the return of government assets and helping to finance public expenditure which is needed for infrastructure, health and education.
“In the steps of monetary policy, the RBI has provided significant monetary easing, broad-based, and appropriate through interest rates and accommodating attitude,” Schipke said.
It is assisted by the time progress guidelines and the country’s contingent on the level of policy and, recently, on the purchase of assets, for better anchor market expectations in the midst of unprecedented uncertainty.
Liquidity measures produce cumulative injection of more than six percent GDP during March 2020 2021 and help avoid the wide-based liquidity crisis for financial and non-financial companies, he added.
“Among the financial sector steps, the creation of the company’s reconstruction of national assets Ltd is a welcome development that shows the efforts of the authorities to secure financial stability and to overcome the problem of bank assets depressed,” IMF officials said.
In addition, he said the recent PSB recapitalization and the privatization of two public sector banks and one state-owned insurance company is estimated to be estimated and “we are waiting for further details”.
“We hope that this initial privatization will pave the way for further reform, substantial reduction in the government footprint in this sector, and finally the encouragement for the resilience of this sector,” he said.
“We also welcome structural reforms such as labor market reform bills, which, among other things, including easing administrative barriers and expand the benefits of social security for permanent workers and migrant workers, tend to accelerate labor formalization and” Schipke said.
He also said that the latest steps to liberalize FDIS and the country’s commitment to fulfill the promise of the Paris Agreement Climate mitigation support India which is more green and more integrated globally.