coal crisis: economy on track, temporary coal crisis, says finance secretary TV Somanathan

India’s economy is on track for a “fairly steady and sustainable recovery” as the chances of another major Covid outbreak have diminished thanks to the country’s vaccination campaign, Finance Secretary TV Somanathan said in a report. interview. He also ruled out any significant impact of the ongoing energy crisis on production, as some experts have pointed out, saying the coal shortage was a temporary problem.

“Without the third wave, without a big recurrence of Covid, I think we are now on the right track for recovery,” Somanathan said.

The government will ensure that the lack of funds does not act as a constraint on capital spending and budgeted spending will take place, said Somanathan, who is also the expenditure secretary.

The sale of Air India, he said, will reduce the government’s interest debt, with the new buyer taking over some of the debt. The government will save around 20 crore per day that it has invested in Air India.

Effect of vaccination

The airline is bought by the Tata group.

The privatization process of two public sector banks is continuing and legal and regulatory issues are being resolved.

“The work is in progress – it’s not that they’re not being addressed, it’s in the process of being done,” he said.

As the vaccination campaign has intensified, the chances of a third wave of Covid have faded.

“I think with the vaccination having crossed 50% for the single dose and with the emerging figures and the fact that the vaccination will also continue daily at a fairly good rate, the third wave seems unlikely,” he said. declared. “Without the third wave, without a big recurrence of the Covid, I think we are now on the right track for recovery.”

The finance secretary acknowledged that there were some downside risks, such as rising international commodity prices and supply shortages outside the country, which could hamper the recovery.

“Nonetheless, I am reasonably optimistic that we are on the right track for a fairly stable and lasting recovery,” he said.

He called the power crisis a fleeting affair.

“I think there was a weather related issue that affected coal supplies, national coal supplies. I think it’s a temporary problem,” he said.

Somanathan said the Ministry of Finance will ensure that the flow of funds is adequate and support the investment projects of the ministries.

“Investment spending, as part of the budget estimate (…) we will ensure that the lack of funds does not restrict investment spending,” he said, adding that he was optimistic about the achievement of the investment target.

Asked whether the government had bit the bullet on some long-standing outstanding issues such as the retrospective tax, the telecoms aid plan and the privatization of Air India, he said the starting point was the political measures of Atmanirbhar Bharat of May 2020.

“A lot of these reforms were quite radical,” he said, pointing to the new public sector policy, which was then outlined and announced in the budget. “I think it’s more of a change that has developed over a period of time; it’s not a sudden change. But what you see is the execution.”

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