Financial Daily from THE HINDU group of publications
Friday, Nov 26, 2004

Cross Currency

Group Sites

Industry & Economy - Economy

`Govt keen on public-private partnership'

Our Bureau

New Delhi , Nov. 25

THE UPA Government is taking all possible steps to enhance public-private investment for promoting economic growth and poverty reduction in the country, the Finance Minister, Mr P. Chidambaram, has said.

Chairing the first meeting of the Parliamentary Consultative Committee attached to the Finance Ministry here on Thursday, Mr Chidambaram said that an enabling environment was necessary for attracting investment along with proper infrastructure and larger investible resources.

Asserting that revenue deficit meant dissaving, he emphasised that both the Government and the public sector must save and public expenditure should be reduced so as to free resources for investment.

Reiterating that the Government was committed to promoting public-private partnerships (PPP) for infrastructure development, Mr Chidambaram pointed out that the recent developments in the infrastructure sector, including roads and ports, were good examples of such partnerships. To support such projects, the Government has proposed to set up a special `viability gap funding' facility.

"Most of the infrastructure projects have a long gestation period and may not be fully viable on their own. Financial viability can be ensured through a mechanism that provides Government's support to reduce project costs," he said.

He said that to qualify for viability gap funding, the projects must be implemented with at least 40 per cent private equity in these specific sectors, namely, roads, railways, sea-ports, airports, power, water supply, sewerage and solid waste disposal in urban areas and international convention centres.

Responding to issues raised by the members during discussions, the Finance Minister stated that bank credit was very important for investment in different sectors. He, however, stressed that the Government, as the owner of the public sector banks, should only play an indicative role.

On the infrastructure front, Mr Chidambaram admitted that there have been some bottlenecks in ports, particularly at the Jawaharlal Nehru Port Trust. He however, indicated that this was because of a 35 per cent growth in imports and a 25 per cent growth in exports in the current year. This, according to him, was a healthy sign for the economy.

The highways sector was slack in the first quarter and is now picking up.

The slackness was because of the delays in awarding contracts in the first quarter due to the operation of the electoral code of conduct, he clarified.

The Finance Minister stated that a healthy debate is going on for the utilisation of foreign exchange reserves. Some respected economists have argued that the foreign exchange reserves should be used for infrastructure investment, while others are not in favour of it.

He assured the members that a final decision would be taken only in consultation with the Prime Minister, Dr Manmohan Singh.

More Stories on : Economy

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Dumping duty mooted on slabstock polyol imports

Hold-up in Spending Bill; extra H-1 B visas may take a while
Plan panel to begin talks with States from Nov 30
Six State Finance Ministers to meet PM on debt relief
`Govt keen on public-private partnership'
Trek for food
Bengal plans sensory tech watch on polluting sponge iron units
Comprehensive fertiliser policy urged
Israeli delegation to visit India in Dec
`Doing business with USA'
Organon working on drugs for andropause
Health Ministry to enforce anti-tobacco law from Jan 1
MPI ties up with cardiac centre
Eye surgeons' meet today
`Forex reserves for public investment, a sound idea'
Modern Shanghai towers way above Mumbai
KSEB bid to improve distribution system
To meet steel plant needs — Posco may focus on Paradip port launches magazine
Finance Ministry amends Cenvat credit rules
Northern States urged to cut entertainment tax
Report on water resources in next Budget session
Cigarette makers divided over nicotine content notice on packs
CAP vocational training institute inaugurated
Janapriya plans townships in Mumbai, Bangalore
Spot gold may correct lower
Kerala ideal for biotech, IT initiatives: Muthunayagam
Synopsys science fair for Govt school students
Non-Kannada films: Industry wants legislation on three-week moratorium
EPF role in social security lauded
IIM-K annual management seminar from tomorrow
Industry fears rise in raw material costs on account of Railway freight hike

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2004, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line