Jaitley hints at special steps to boost public spending on infra

The Centre will focus on encouraging domestic and international investments in manufacturing and infrastructure in the coming months, Finance Minister Arun Jaitley told industrialists here on Monday.

Public spending on infrastructure will be used to rejuvenate investments into the sector and instil confidence in public-private partnerships. With a consistent and clear policy, the Centre is confident of attracting global investments, he said.

At an interactive session on “Crafting an Economic Turnaround”, organised by the Confederation of Indian Industry, Jaitley said the coming Budget will set out the Centre’s approach. Economic decisions need to be consistent and transparent without hidden costs, he said.

Earlier the “adversarial taxation structure” had “scared away investors”, Jaitley said.

The Centre is also keen on rationalising “all possible subsidies”, while supporting the poor, he added. In line with this petrol and diesel prices have been linked to the market and LPG subsidies delivered directly to the beneficiaries’ bank accounts. The suggestions of the Expenditure Management Commission are also under consideration, he said.

Over the past few months the Centre has worked towards restoring credibility in the economy as it had “fallen off the global radar”, Jaitley said.

The Centre has moved fast in a number of areas, including hiking the cap on foreign investments in insurance and defence, coal block allocation through a “market mechanism and non-discriminatory approach”, and amending the land acquisition law, the Finance Minister pointed out.

Responding to a query by R Seshasayee, Chairman, CII Economic Growth and Investments Council, on whether public or private investments will lead the investment cycle, Jaitley said, “The Government will take special steps for public investments”, despite the tough fiscal and revenue situation.

To a question from Venu Srinivasan, CMD, TVS Motor, on what the Budget will have to attract investments and improve the ease of doing business, the Minister assured the industrialists that the Centre is committed to creating a business-friendly environment.

Jaitley wondered how industry bodies had allowed the Companies Bill to be finalised. The Centre has identified over 50 problematic points in the Bill. Whatever could be addressed through rules and notifications is being done but still over 15 amendments are needed, he said.

N Srinivasan, Vice-Chairman and MD, India Cements, asked for policies aimed at increasing demand by supporting infrastructure development and housing. New investments apart, existing industries should be able to run to capacity, he said.

Jaitley said the Centre was working on measures to support road infrastructure to kick off investments and housing, particularly in the affordable and poor segments.

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