CHENNAI: Union Minister of Finance Arun Jaitley made it clear that the incumbent government was serious in its efforts to boost flagging infrastructure sectors, including Highways and Housing.
Certain ‘special steps’ would be taken by the government to boost this sector, the Finance Minister said.
Speaking at an interactive session organised by the Confederation of Indian Industry here on Monday, Jaitley said that even though it was a challenging situation to find themselves in, certain special steps would be taken to increase public spending in the sector. “It’s a challenging and a difficult opportunity for us. But I think we have to take some special steps as far as public investments is concerned,” he said.
The highways and housing sectors especially have been under an extended slowdown in the last 6 to 7 years. According to the minister, the blame for that rested on the policies of the previous government.
“Disputes, high interest rates and contractors on the verge of bankruptcy have meant that the sectors have slowed down. But we are trying to revive both these sectors,” said Jaitley.
“We want to start with some public funding to highways so that the authority starts spending its own money. This should eventually bring in the private players too. Land law liberalisation and falling interest rates will also boost affordable housing,” he added.
The government is also fast on the track of rationalising subsidies. Jaitley referred to the steps already taken, including the measures on de-subsidising oil and the DBTL that has gone into effect from January 1. “We have to gradually rationalise all possible subsidies,” he said.
The government is also likely to include some of the suggestions of the Expenditure Finance Commission headed by Bimal Jalan, former RBI Governor, in the 2015-16 budget. The commission, which submitted its interim report to the government recently is reported to have made several steps to rationalise subsidies across sectors.
Jaitley also defended the implementation of the Goods and Services Tax, which he said could only boost the investment and business climate in the country. “Not a single state would “lose a single rupee” he declared. Moreover, he added, establishment of rural infrastructure and industrial corridors would increase the price of land and generate employment for rural youth.
The government’s stress on infrastructure especially is likely to be extremely beneficial to several down at heels industries is like cement, which have been hit hard by the slowdown in infrastructure growth. The Minister, during the session, reiterated to N Srinivasan, Managing Director of India Cements, that the boost to infrastructure would bring back cement demand.
Cement plants in India, with over 350 mt in production capacity, have been consistently running at 55% capacity for the last three years.