FM to do some stock-taking

In a move that would mark another significant step in demystifying the making of the fiscal policy, Finance Minister Jaswant Singh will present a mid-term progress report on the economy to Parliament on Tuesday.
The review is expected to highlight the signs of ''upturn'' in the economy, while hinting at key areas the government would focus on in the budget-making process, which is already underway.
The review would be a mini-economic survey, it is expected, covering all key segments of the economy. The finance minister had promised to demystify the budget-making exercise and told ET in an exclusive interview (ET, November 18) that he would present the Parliament with a mid-term report on the status of the economy and what his ministry has achieved.
While GDP growth during the first half of the current fiscal was around 5.2%, the double-digit growth in exports is considered above average. After a lengthy lag, import demand has picked up and growth in imports during September and October was above 30%.
The other aspect about which the government is bullish, is the low interest rate regime. Companies with ''AAA'' rating are borrowing at 7%, while the situation is expected to improve further since inflation is also low. Real interest rates are at historic lows, in the region of 3% for the sovereign. The concise mid-term review will feature the challenges as well as opportunities before the economy.
The exercise is part of the efforts to inject transparency, so as to start off an informed public debate on economic issues, chief economic advisor Ashok Lahiri said. The government is also expected to highlight revenue collection and reform efforts.
In view of the criticism faced by the recommendations of the taskforces headed by the finance minister''s advisor, Dr Vijay Kelkar, the government is also likely to hint at the possibilities that could be examined before the ''03 Budget.
The status of implementing the state-level value added tax regime, scheduled for April ''03, would also find mention, sources said. The bid to revive UTI, IDBI and IFCI would also be highlighted in view of the beneficial effects on the banking industry and the economy as a whole.
The benefits projected from the recently-passed securitisation law are expected to be explained. The fact that the Parliament has finally started clearing key bills pending before it, is expected to be highlighted by the finance minister, even if not cited in the review document.