Govt to kick off public expenditure

NEW DELHI, Aug 13: The government will go on a spending spree on infrastructure projects from mid-September to generate demand and prompt...

NEW DELHI, Aug 13: The government will go on a spending spree on infrastructure projects from mid-September to generate demand and prompt the economy to effectively tide over the recessionary phase. This was indicated by finance minister Yashwant Sinha while addressing a meeting of banks, financial institutions and industry leaders organised by FICCI here on Thursday.

Sinha said that progress of mega projects would be reviewed by the prime minister and the finance ministry separately and the budget proposal to step up 35 per cent investment in infrastructure sector would be implemented from September 15, the time when the busy season starts. The minister said that higher allocation for infrastructure development would generate more demand for core sectors like cement, steel etc. which in turn would have positive impact on the overall economy.

He said that there would be bi-monthly review meetings to take stock of the target achieved in the infrastructure projects. Sinha also added that the completion ofthese projects, "will not only jump start the economy but will also overcome infrastructural bottlenecks."

Story continues below this ad

He also pointed out that the private sector projects which were pending for clearances would be expeditiously approved. The counter guarantee agreement for the power project, he said, would be signed on Friday.

MARKET FLUCTUATIONS: Sinha said the Reserve Bank of India will fight speculative attack on the rupee. "We have rode over the storm and it is futile to fight the market. We must fight speculation," he said.

DISINVESTMENT: The finance minister said the government would go by its pronounced agenda and launch the programme by mid-September. Initially, it would be for four public sector undertakings and later the programme would be extended to others including strategic sale of public enterprises.He also stressed that "whether the market respond or otherwise, we will not wait for long. We will go ahead with our disinvestment programme as per the schedule".

The finance ministeralso said that it was not fair to describe the state of the economy with a pre-disposition of "doom or gloom". He added that it was a mind-set but what was on the ground would indicate the contrary. For instance, he said the overall industrial production in the first quarter for `98.