With the Union Budget for 2016-17 set to be presented next month, finance minister Arun Jaitley said the government will continue to step up public investment to boost growth in the wake of continuing challenges in global economy. He said the government is making room for further private sector participation in the infrastructure space and the railways will soon invite bids for modernisation of 400 stations.
“The public investment has been stepped up in the last year and it will continue to remain stepped up and therefore when you fight a global slowdown public investment has to lead the way,” Jaitley said. Speaking at the foundation day event of the India Infrastructure Finance Co Ltd, the finance minister said: “The railways has now come on to directionally the right track. We are inviting the private sector including foreign investment into the infrastructure…very shortly the railways is going to come with its proposed bids for development of 400 railway stations in the country.”
Having raised some funds from tax-free bonds, the railways intend to mobilise international investment, he said. “The LIC has made available long term capital to them (railways). And that’s an area which directionally I think is on the right track.
The movement needs to be a little expedited,” he added.
The government is also considering participation of private sector in mid and small airports to improve their managerial efficiency, he added.
“They probably need managerial efficiency and therefore, management participation of the private sector in the management of some of these airports is a proposal which they have been considering. I think the government is very clear with
regard to the direction in which it wants to move,” he said.
Jaitley said enhanced public investment in infrastructure sector last year had now started showing results. Last year a lot of resources were put in the direction of national highways, rural roads and railways, he said.
“The result of this is visible now that the stalled projects among the highways have got moving. As a result of enhanced public investment, even private sector players who had got bogged down in their disputes have re-entered the field,” he said.
The years and months to come will be those where we will be seriously investing in infrastructure. We should be able to show much more positive result as far as Indian economy is concerned making it a stable force which we have become even in the midst of even in a crisis like situation across the world, the minister said.
Commenting on the recently set up National Infrastructure Investment Fund, the minister said the government is in touch with many global sovereign and pension funds to become partners.
He emphasised that global economy was passing through a phase of volatility but lower crude oil, commodity and mineral prices were an opportunity for India.
“World is passing through a phase of great volatility. There is no easy day. And therefore the trends that global economy pass going to throw up will be challenging,” he said, adding that the opportunity provided by the low oil prices has enabled the government to channelise a large part of our savings in central areas of infrastructure.