Prime Minister Narendra Modi will soon meet 15 leading global fund houses amid heightened interest from foreign investors seeking stable returns in India, according to Tarun Bajaj, economic affairs secretary.
The government is also working with the central bank to get India included in the global bond indices, which would lift flows into the bond market.
“Fund houses from all over the world are getting in touch with us and saying if you can provide us with some good assets which require patient capital and give not very high returns but stable returns,” Bajaj said at a virtual conference hosted by the Confederation of Indian Industry (CII) on Wednesday.
“That is another area we are looking at and the prime minister is soon, himself, going to meet about 15 leading (fund) houses from the world to have an interaction and to get their views,” he said.
Pension funds from Canada, the US, Europe and Australia have reached out to the government, Bajaj said. The Centre is also working with domestic insurance and pension fund regulators to tweak regulations, so that more stable capital flows towards infrastructure projects.
“The EPFO has been more than active, I would say, to actually consider tinkering with some of their regulations to see what money they can put into this (infrastructure) sector. So are we trying with the insurance regulator and pension regulator,” Bajaj said.
Global bond indices
The government was also trying to get India included in the global bond indices.
“The Reserve Bank of India and we are actually working towards that and I am sure, in some time, we should be able to gain entry into that and that will provide further depth, especially to the G-Sec bond market,” Bajaj said.
The global bond indices usually comprise investment-grade government bonds from across the globe with tenors over one year. Inclusion in such an index would spur flows from investors benchmarked to the index.
Additional government spending
The government was also working on ways to increase its expenditure to boost the economy and any additional support would be provided in the revised estimates of this year’s budget, Bajaj said.
“The finance minister, yesterday (Tuesday), in our interaction, or day before, has mentioned that. She has told us to work on that (additional expenditure),” Bajaj said.
“We have actually mentioned it to the departments to push such capital expenditure that has a multiplier effect, it touches the last mile where actual work happens on the ground. And if there is more money needed, we would be providing that in our revised estimates also,” he added.
Privatisation of PSUs
Bajaj expects Cabinet approval for privatisation of public sector units (PSUs) to come through soon.
“Though it’s an open secret but still, till it gets the stamp of the Cabinet, we are not satisfied about it. It should happen very soon,” he said.
So far, the government has come out with privatisation plans for PSUs like Concor, Air India and BPCL.
“Hopefully, next year when we have this policy actually working, we should have some processes which should help in fast tracking it,” Bajaj said.
Bajaj was confident of seeing results from the production-linked incentives (PLI) scheme for mobile phones and pharmaceutical products since it was an outcome and output-oriented scheme.
Under the scheme, India would be able to take advantage of the diversification of global supply chains, he said, adding that another seven-eight sectors are likely to be added to the scheme.
“The kind of response we have received on the mobile phones, where we had our meeting a few weeks back and finalised the contours, gives me a lot of confidence that there is a demand in the world now to have a diversification in our supply chains and India can definitely take advantage,” Bajaj said.