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Economists see Pranab pushing reforms

Source: PTI
May 25, 2009 15:20 IST
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Economists expect a push to reforms by newly-appointed Finance Minister Pranab Mukherjee, who they said is the right person to head the important ministry.

"Excellent! (on Mukherjee being named as finance minister). He is a very experienced person and is the right choice for the job. Mukherjee is a reform-minded person and I expect economic reforms to go forward during his tenure," ICRIER director Rajiv Kumar said.

"Mukherjee had held various other portfolios so it will be an added advantage," he added.

Commenting on appointment of Mukherjee as the finance minister, former chairman of Prime Minister's Economic Advisory Council Suresh Tendulkar said, "He is an experienced person for the finance portfolio."

On the possibility of the new minister expediting economic reforms, he said, "that's what everyone expect."

Mukherjee, who was the first one to take oath of office after Prime Minister Manmohan Singh, will have to present the budget for 2009-10, which will spell out the policies and priorities of the new United Progressive Alliance government.

Talking to reporters after being named as the finance minister, Mukherjee had said the government would endeavour to present the budget in due time to avoid uncertainties.

Economic think-tank NCAER Senior Fellow Rajesh Shukla said, "He is very mature and I see reform to go forward during his tenure."

Shukla added, Mukherjee has expertise in various fields as he had headed various ministries and so he is the right person for the finance portfolio.

Mukherjee, who was holding charge of the finance portfolio in the earlier UPA government presented an interim budget in February in view of the general elections for the 15th Lok Sabha.

On Saturday, Mukherjee was named India's finance minister while former Karnataka Chief Minister S M Krishna took charge of the foreign ministry as the prime minister allotted portfolios to six of his 19 cabinet ministers, a day after taking oath at the head of a new Congress-led government.

With a stable and pro-economic reform Government in place, economists said the Centre needs to boost infrastructure and focus on disinvestment to alleviate fiscal stress in the system.

"Political stability is a positive development. Now the Government needs to articulate its policy on how to revive growth. It needs to strongly boost infrastructure development and focus on disinvestment," Bank of Baroda chief economist Rupa Rege Nitsure said.

Investor sentiment and business confidence has clearly risen in the past week and now it is up to the government to formulate a strategy of boosting infrastructure, agriculture and other sectors still feeling the impact of the global economic meltdown, economists say.

With the stock market expected to perform better vis-a-vis other emerging economies, Yes Bank's Shubhada Rao said that the government must focus on divestment. "Divestment should be the top-most priority as it will help alleviate fiscal stress," Rao said.

Highlighting an important dimension to this, Crisil's director and principal economist D K Joshi said that the proceeds of divestment should be earmarked for a particular head, like infrastructure.

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