Putting the onus of economic revival in the Centre’s court, private sector honchos on Tuesday urged the Government to ramp up public investments, especially in infrastructure in the upcoming budget.
The Centre would do well to dip into the large cash pile of nearly ₹2 lakh crore lying with the major Navratana companies to give a much needed boost to infrastructure and thereby fast-track Indian economy’s growth, said the captains of Indian Industry at their customary pre-budget meeting with the Finance Minister at North Block in the capital.
It was quite clear that Corporate India’s representatives wanted the Government to take the lead and pump-prime the economy through increased public investments.
This stance was more or less in line with the thought espoused by the Finance Ministry in its recent mid-year economic analysis tabled in Parliament.
This Finance Ministry report had said that it was now imperative to consider the case for reviving public investments as one of the key engines of growth.
“We want both public investments and also private investments to co-exist. Our suggestion was not to replace private investments with public investments to drive growth. Both has to be there," Ajay S Shriram, President, Confederation of Indian Industry, told BusinessLine outside North Block after the nearly two-hour long meeting.
Assocham President Rana Kapoor separately said that it made eminent sense for the Centre to utilise the surplus ₹ 2 lakh crore lying in Navratna balance sheets to spur economic growth, now that most private sector companies’ balance sheets are weak and required stimulus.
To de-risk infrastructure, the CII has suggested that the Government could contemplate a reverse Build, Operate and Transfer (BOT) structure for funding the initial construction cost for creating infrastructure assets.
Once the projects are completed and start generating cash flows, they can be given out to the private sector for operation and maintenance on a revenue sharing basis, Shriram said, adding that this would help crowd-in private investments
FICCI President Jyotsna Suri said she had urged the Finance Minister Arun Jaitley to rationalise tax structure and also help bring down the cost of capital through reduction in interest rates.
"I can't give out the quantum of reduction required. But certainly cut in interest rate will help industry," she told BusinessLine outside North Block after the pre-budget meeting.