Pace of reforms to continue in coming months: DEA secy assures investors

Economic Affairs Secretary Tarun Bajaj on Friday assured investors that the pace of reforms would continue in the coming months, including in the upcoming Budget.

Talking about the state of the economy, he said the central bank has indicated a slight positive growth both in the third and fourth quarters of the current financial year.

The Indian economy had contracted by an unprecedented 23.9 per cent during the first quarter of this fiscal due to the impact of the coronavirus pandemic. However, the pace of contraction narrowed in the second quarter to 7.5 per cent.

On revenue mobilisation, Bajaj said "the advance taxes numbers have also been better than what we had anticipated, and now the shortfall of total revenue that we have has actually come down as compared to the second quarter...or as compared to September 15 when the second advance taxes had come."

Agriculture has done better-than-anticipated and has been the real green shoot, he pointed out.

"All in all, we are hoping that the economy should be back on track and we are hoping for a good robust growth in the next year obviously because of the low base effect also," he added.

Addressing a virtual conference organised by industry chamber CII, Bajaj further said the pace of reforms would continue in the coming months.

"I can only say that the reforms that we have begun, or the pace of them that was shown during this pandemic, I am sure will continue... in the coming months, in the coming Budget. So that's an important aspect. The government is committed to that," he emphasised.

The government is likely to present Budget 2021-22 on February 1 in Parliament.

Talking about the Production Linked Incentive (PLI) scheme, he said this is expected to boost manufacturing capability of India and help the country become a major part of the global supply chain.

Last month, the Cabinet approved the PLI scheme for 10 key sectors, including telecom, automobiles and pharmaceuticals to give an impetus to the manufacturing industry.

The scheme would entail an expenditure of about Rs 2 lakh crore and is expected to attract substantial capital inflows.

Earlier this year, the government had announced PLI schemes for electronics, mobile and active pharmaceutical ingredients (APIs) sectors.

With regard to government spending, Bajaj said it has picked up as per the latest numbers.

The government expenditure and capital expenditure have seen an uptick of 5 per cent and 15 per cent year-on-year in November, he added.

At the same time, foreign direct investment and foreign portfolio investments have also witnessed a surge in the first half of the current fiscal, he added.

This reflects investors' faith in both the capital and money markets, he said, adding this was further aided by a number of steps to ensure foreign flows.