The Hindu Business Line : Higher public investment to stimulate demand in economy

New Delhi, Dec. 19 Justifying the Government’s move to ask for a substantially large grant from Parliament during 2008-09, the Union Home Minister, Mr P. Chidambaram, on Friday said that the demand for additional cash outgo of about Rs 1,48,000 crore so far this fiscal was intended to minimise the impact of the global slowdown on the Indian economy.

The Lok Sabha on Friday approved additional spend of Rs 55,604.83 crore, including net cash outgo of Rs 42,480.10 crore, as part of the second batch of supplementary demand for grants for 2008-09. The concerned appropriation Bill was also passed.

“What we are doing today is to use the well tried instrument of enhancing public investments to stimulate demand in the economy. Besides the Rs 7,50,000-crore budget, we are now adding stimulus (additional cash spend of Rs 1,48,000 crore) to ensure that the economy continues to grow at a brisk pace,” Mr Chidambaram told Lok Sabha here.

Mr Chidambaram, standing in for the Prime Minister, who holds the finance portfolio, was replying to the discussions on the second batch of supplementary demand for grants for 2008-09.

So far this fiscal, the Government has sought Parliament approval for additional expenditure of Rs 2,93,000 crore (involving net cash outgo of Rs 1,48,000 crore) through the first and second batch of supplementary demand for grants.

In 2007-08, the Government had in the first and second batch of supplementary demand for grants sought approval for additional expense of Rs 53,700 crore (net cash outgo of Rs 22,300 crore).

In his reply, the Home Minister today made it clear that not a penny of the additional spend approved by Parliament would go to any corporate house or big businesses directly. “Every rupee will be spent to ease the pain of poor in India. They are all for social justice programmes in social sectors,” he said.

Stating that the global slowdown will affect India to some extent, Mr Chidambaram expressed confidence that India would still grow at least 7 per cent in 2008-09 and not at the “desultory pace of 5.5 per cent seen in the NDA regime”.

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