Union Budget 2010: Perfect time for govt to focus on fiscal consolidation, says Stephen Roach

Stephen Roach, chairman, Morgan Stanley, Asia, in a chat with ET, Now talks about the Budget.

What do you think the Indian government’s agenda should be for this Budget?

Given the resilience of the Indian economy and solid growth prospects going forward, this is a perfect time for the government to focus on fiscal consolidation. I am not looking for draconian Budget cuts but to get that deficit down, say a 1.0 to 0.5 of GDP, would send a very important message to the markets and to the Indian economy.

What do you think of the government’s disinvestment programme for next year? There are some concerns about oversupply of paper and of waning investor appetite, which is what we have seen in the last couple of govt issues.

I do not think so. Investors around the world are very intrigued by Indian growth and development prospects and some unwinding of government positions in several of the major state-owned sectors would be greeted, if it is managed well, very positively.