This will be the 24th meeting of FSDC and the first meeting of this fiscal year because the last meeting was held on December 15, 2020.
Finance Minister Nirmala Sitharaman convened a meeting of the Financial Stability and Development Commission (FSDC) on September 3 to discuss the state of the financial sector and strategies to support the initial recovery of the economy hit by the pandemic. This will be the 24th meeting of FSDC and the first meeting of this fiscal year. The last meeting will be held on December 15, 2020.
The conference will be held shortly after the GDP data for the first quarter is forecast to grow by about 20% and contract by 24.4% in the same period of the previous fiscal year. Some macroeconomic indicators showed initial recovery, including improved fiscal mobilization, credit growth, a rebound in manufacturing in certain sectors, and a rebound in exports. According to sources, the FSDC meeting will be held on Friday through a video conference.
The source also said that the Minister of Finance may require financial sector regulators to relax and coordinate investment rules for infrastructure investment trusts (InvITs) and other tools that will be used to monetize public assets such as roads, electricity, highways, and railways. Earlier this month, Sitharaman announced a Rs 6 crore National Monetization Channel (NMP), which will seek to unlock the value of infrastructure assets in everything from energy to roads to railways.
The Union budget for 2021-22 has identified the monetization of operating public infrastructure assets as a key means of sustainable infrastructure financing. To this end, the budget stipulates the preparation of a “national monetization channel” for industrial infrastructure assets that may be abandoned. NITI Aayog consulted with infrastructure ministries and commissions to prepare a report on NMP.
The total value of the portfolio of assets under the NMP over the four-year period is 600 million rupees. The estimate is equivalent to 14% of the center’s proposed expenditure under the National Infrastructure Pipeline (Rs 43 million). Senior officials from the Ministry of Finance will also attend the meeting.
The FSDC is expected to review all aspects related to the stimulus plan announced by the government to overcome the economic crisis caused by the pandemic. The governor of the Reserve Bank of India and the head of the Securities and Exchange Commission of India, the Insurance Development and Regulatory Authority of India, the Pension Fund Development and Regulatory Authority, and the International Financial Services Center Authority are also in charge of the Financial Services Development Authority.