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Sticking to the path of fiscal consolidation, the government is now trying to use a number of “innovative” measures such as deepening the bond market and setting up the National Investment and Infrastructure Fund to finance the core sector, which requires over $1 trillion of investments in the next few years.
“We have to be quite innovative and transformational in infrastructure financing,” said Minister of State of Finance Jayant Sinha on Saturday at a panel discussion at the Advancing Asia conference of the International Monetary Fund.
Noting that the government is also trying to lower the fiscal deficit to 3.5 per cent of the GDP in 2016-17 from the targeted 3.9 per cent this fiscal, Sinha said the government is trying to utilise off-Budget resources.
“We need to build up other areas without having space in the Budget,” he said, adding that measures such as rupee denominated bonds or masala bonds are being issued for the infrastructure sector.
The Railways, Nabard and the National Highways Authority of India have also been asked to step up bond issuances.
The government is also using three approaches of prioritisation, innovation and de-bottlenecking to finance core sector projects.
“We have decided to give priority to some aspects of infrastructure --- irrigation, rural roads and railways which has a huge multiplier effect,” he said, adding that the government is also working on other areas such as smart cities and affordable housing.
The government plans to increase spending in railways to ₹ 1 lakh crore in 2016-17 and ramp it up further to ₹ 1.2 lakh crore in 2017-18.
India, Sinha said, has 1,300 public private partnership projects, which is more than any other country in the world.
He further said the risks in PPP projects have to be shifted from the private sector to the government. Projects on the ground also need to be given a push and avenues.
NIIF : Regarding the chief executive officer of the NIIF for which the Finance Ministry had advertised, Sinha said that about 82 people had applied of which seven to eight have been shortlisted. “A decision will be announced soon,” he said.
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