1. Government to maintain public investment tempo, says Arun Jaitley

Government to maintain public investment tempo, says Arun Jaitley

The Centre will maintain its accelerated tempo in public investment as the Indian economy battles a global slowdown to achieve higher growth, finance minister Arun Jaitley said on Tuesday.

By: | New Delhi | Published: January 6, 2016 1:03 AM

The Centre will maintain its accelerated tempo in public investment as the Indian economy battles a global slowdown to achieve higher growth, finance minister Arun Jaitley said on Tuesday.

“Public investment has been stepped up in the last year and it will continue to remain stepped up… When you fight a global slowdown, public investment has to lead the way,” Jaitley said at an infrastructure development seminar. In sharp contrast to the boom years, the Indian economy now is powered by government investment and private consumption. Keeping in view the weak private investment, the government budgeted a 29% increase in capital expenditure for FY16 at Rs 2.41 lakh crore. During April-November of the current fiscal, the Centre’s capital expenditure was Rs 1.59 lakh crore, which was 66% of the Budget estimate (it was 54% of the budget target in the year-ago period).

With corporate balance sheets remain highly stressed and only expected to recover slowly, private investment in FY17 will not be significantly greater than in FY16, according to the finance ministry’s Mid-Year Economic Analysis report. As the country’s infrastructure does not match its growth ambitions, economists in the finance ministry said public investment may need to be preserved and even accelerated in order to fill in for and indeed crowd-in private investment in FY17. With domestic demand tepid and exports growth rate shrunk, they revised downwards their estimate of the real economic expansion for the current fiscal to 7-7.5% from 8.1-8.5% forecast in February.

To shore up infrastructure funding, Jaitley said the National Investment and Infrastructure Fund with an initial corpus of Rs 40,000 crore would play a catalytic role in the financing of infrastructure projects. Several sovereign funds and pension funds from Russia, Singapore, the UK and the UAE are willing to participate in the NIIF, in which the government stake won’t exceed 49%.

Tags: Arun Jaitley
  1. Hemen Parekh
    Jan 6, 2016 at 7:05 am
    Fear of Being Ridiculed ? Many a great ideas have remained unexpressed due to fear of being ridiculed But there have been notable exceptions Idea whose time may not have come but that did not prevent its proponent to speak up - even at the risk of being ridiculed IDEA : Abolish Personal Income tax in order to solve the twin problems of black money and corruption , for ever BRAVE HEARTS : Nani Palkhiwala Ram Jethamalani Subramanyam Swamy When scions of business / industry meet Shri Arun Jaitleyji today , to give their suggestions in respect of Corporate Income Tax provisions in the forthcoming Union Budget , will any of them have the courage to advocate : * Abolition of Personal Income Tax ( Revenue loss of Rs 2.5 lakh*Crores ) * Reducing Corporate Tax rates with rise in no of employees ( Incentivize Job-Creation ) * 10 % of GST collection to get credited in PPF accounts of the Buyer of Goods / Services * GST rate increase (in coming years) to be no more than 5 % of CPI rise in previous year * No questions ( as to the Source ) for cash deposited in Jan Dhan Bank Accounts { Permanent Unlimited Amnesty } * FD Interest / Dividends from Infra Bonds / SPVs to be credited to Jan Dhan A/cs * Introduction of 2 % Bank Transaction Tax ( Revenue gain of Rs 15 Lakh*Crores ) * Announcement of " Start Up Act / 2015 " ( read... hemenparekh / Blogs ) * Introduction of Rs 500/1000 currency notes with embedded RFID / unique IP Address I hope those Business Leaders / Industrialists will take courage from the fact that , initially , all ideas get ridiculed which are aimed at , * Upsetting the existing Social Order * Threatening the vested interests * Destroying the cozy comfort * Democratizing the Economic Powers Then a time comes when those very ideas are appreciated and , later, even admired ! Please , do not miss your " Tryst with the Destiny " ! ------------------------------------------------------------------------------------------------------- hemen parekh 06 Jan 2016 ( Source : hemenparekh / blogs )
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