Centre to pump investment in rural infrastructure to counter slump

Our Political Bureau

New Delhi, Aug 28: FINANCE minister Yashwant Sinha on Tuesday said that the economy was facing “problems”, and the government was taking measures to revive growth by pumping investment in rural infrastructure to reverse the slowdown.

“There are problems in the economy. Nobody can deny that .... We have a problem of industrial and infrastructural slowdown”, he said adding there was, however, nothing to worry as the country was sitting on a record 44.4 billion dollars foreign exchange reserves and mountains of food stocks.

Replying to a debate on supplementary demands for grants for 2001-02 in the Lok Sabha, Mr Sinha strongly favoured a National consensus on public sector units. He said that government was looking at reviving them on unit-to-unit basis. Giving examples, he said that the restructuring plans for NTC and IDPL were being considered on a unit-to-unit basis and not as a whole.

“We will see which unit can be revived .... We will try to revive any unit in which there is still some life left,” Mr Sinha said, adding that government has to withdraw from certain areas of activity.

Attributing the slide in growth to steep international crude and petro prices and sluggish agricultural performance, Mr Sinha said that the coutry faced a very flat agricultural growth of about 0.2 per cent in 2000-01.

Foodgrain production declined substantially by about 12 million tonnes from 209 million tonnes in 1999-2000 to about 196 million tonnes in 2000-01, he said, adding the economy still depends on agriculture as demands of 70 per cent of population living in rural areas provide impulst to it.

Describing low growth and slowdown as a global phenomenon due to petro price hike, he said that despite difficulties foreign exchange reserve was stable, inflation under check and balance of payment position comfortable.

Referring to a member’s criticism that the budget for current fiscal was passed without debate, the finance minister asserted that “the budget is not dead. It is alive and kicking and is being implemented. All promises made in the budget will be fulfilled”.

On public sector units, he said that budgetary support of Rs 11,785 crore had been given to PSUs this year and it had revived and restructured 26 units so far.

Refuting charges that the government was “anti-PSU”, he said Rs 8,335 crore worth of loans and interests of these units had been written off.

Of the total 232 Central PSUs operating at present, 106 were loss-making and 67 more, whose net worth had turned negative, had been registered with the BIFR, he said. While a total of Rs 35,780 crore had been invested in these PSUs, their total accumulated loss stood at Rs 38,648 crore, Mr Sinha said.

Referring to fiscal deficit, the finance minister said that it was not the real culprit and what is of more importance is the revenue deficit, which should be under check.Mr Sinha said that the
government would bolster the rural economy to step up the momentum of the economy as a whole.