The Centre is working on speeding up decision-making and changing the mindset at the senior level in banks to encourage funding, according to Nitin Gadkari, Union Minister for Shipping, Road Transport and Highways.

Following demonetisation in early November, bank deposits have jumped by 25-30 per cent. But decision-making is slow at the senior level due to legacy issues.

Banks have to support investments even as they bring down interest costs, Gadkari said, at a pre-budget interaction with industrialists organised by BusinessLine and the Confederation of Indian Industry.

Prime Minister Narendra Modi and Finance Minister Arun Jaitley are addressing the issue to ensure increased lending at low interest rates.

Responding to a question from Shobana Kamineni, CII President-Designate, on whether the government will be as bold in bringing down corporate tax and personal income tax as it has been with demonetisation, Gadkari said the appropriate authority is the Finance Ministry, but he assured “what you are expecting… we are in that direction.”

The government is keen to motivate investments. It is looking at the broad span of infrastructure investments that will also bring down manufacturing costs.

His ministry is focussed on bringing down logistics costs which are at a high of about 18 per cent of finished costs as compared with 10 per cent in China. Priority is on movement of goods by sea and inland waterways which are most cost efficient, followed by rail and road.

Road projects are being expedited through EPC mode and hybrid-annuity model where returns are assured for the private sector participants.

Road projects’ progress that was about 2 km a day when the present government took over had increased to 18 km last year and is now at 28-30 km. The target is about 40 km a day, he said.

Major ports and Shipping Corporation and all organisations under the Shipping Ministry are turning a profit. Last year, it was about ₹ 6,000 crore.

Issues in coal supply and power have been tackled. The steel industry is doing better with the challenge of cheap imports from China addressed.

Housing is a major focus area with a target of ‘housing for all’ by 2022. Middle and lower income groups are being supported with interest subsidy, he said.

Automobile industry will get a fillip with the proposed policy for “scrappage of old vehicles.”

Beginning with the commercial vehicle sector, vehicles older than 15 years will be scrapped.

This will bring down pollution and generate demand. An automobile hub for recycling old vehicle components will be established in the South. This will generate raw material by recycling for auto parts which will bring down costs.

There will be an incentive for scrapping old vehicles with support for buying new ones.

The policy is awaiting Cabinet approval. Once implemented, this will drive the growth of automobiles sector by 40-45 per cent, he said.

Storage and warehouse infrastructure will also get a boost with plans to establish modern warehouse and cold chain infrastructure along ring roads.

A policy is being formulated to encourage investments in this sector, he said.

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