Omicron may not Dent Economic Performance says Anurag Jain, DPIIT Secretary

Says FDI Policy to be revised to Facilitate LIC Divestment; e-Com Policy under Discussion

The surge in Covid-19 cases caused by the highly contagious Omicron variant, is unlikely to dent the country’s economic performance, at least not more than 5-10 basis points, as the nation is prepared this time to deal with the virus, Anurag Jain, Secretary, Department for Promotion of Industry and Internal Trade (DPIIT) has said.

The DPIIT is coming out with a revised FDI policy to facilitate disinvestment of the country’s largest insurer LIC, Jain added addressing a media briefing on Thursday.

‘Not much impact’

On the country’s overall preparedness to face the spike in Omicron cases, Jain said that during the first Covid-19 wave in 2020, there was a huge negative impact on economic activity, but in 2021, despite a bigger surge, the nation coped better as overnight systems were changed and people started working online within a few weeks.

“This time we are much better prepared. There won’t be much impact...Now systems are already in place. All things that can happen in the virtual mode are happening. People are mentally prepared. They are following protocols and know how to isolate. The Omicron wave is huge, but hopefully its fatalities and ICU rates will be very low. Also our vaccination levels are better and we know that vaccinated people are less affected,” he said

“If there is a small blip, say to the extent of 5-10 points, that is a different thing, but we don’t expect a huge problem due to the Omicron wave on the economic front,” Jain added.

The DPIIT Secretary assured that the government was well prepared in terms of oxygen supply and could meet demand of up to 19,000 metric tonnes.

LIC disinvestment

On the proposed disinvestment of LIC, Jain said the DPIIT was working on further simplification of the FDI policy as it was urgently required for facilitating disinvestment of the insurance company. The DPIIT has already had two rounds of discussions at the Secretaries level with the Department of Financial Services and Department of Investment and Public Asset Management (DIPAM) and all three were on the same page regarding what needed to be done, Jain said. “We are in the process of drafting those changes in the FDI policy. We will go to the Cabinet (for approval), “ he said.

The current FDI policy allows 74 per cent foreign investment in the insurance sector under the automatic route. But LIC is administered through a separate LIC Act which has no separate provisions for foreign investments. The long-awaited e-commerce policy has been finalised at the DPIIT level and circulated to other departments. Now there will be higher level discussions with departments following which the policy will be finalised, the Secretary said, adding that final touches were also being given to the national retail trade policy.