New Delhi: Increased government spending through more funds in the form of public investment will continue to drive the efforts to revive the economy in the face of a global economic slowdown, finance minister Arun Jaitley said on Tuesday.
“We made an increased allocation towards public investment last year. Public investment will continue to remain stepped up. When you are fighting global slowdown, public spending has to lead the way,” he said at an event marking the completion of 10 years of the India Infrastructure Finance Co. Ltd (IIFCL), a state-owned company that provides long-term finance to viable infrastructure projects.
IIFCL was recently appointed as the interim investment adviser of the National Investment and Infrastructure Fund, a sort of sovereign fund to be used to develop stalled infrastructure projects.
In 2015-16, the government allocated Rs.1.25 trillion as additional public investment outlay, of which Rs.70,000 crore of capital expenditure was earmarked for roads and railways.
The mid-year economic review that was released in December 2015, too, had backed the need for increased public investment in the year ahead (2016-17). It pointed to the slow pick-up in private investment and called for increased public investment and relaxation in fiscal deficit targets for the next fiscal year.
Jaitley in his address also stressed the need to infuse more funds into rural road projects as well as corporatization of large state-run ports. He pointed out that the steps taken by the government, including the restructuring package for state electricity boards and the initiatives to revive the road sector, will help to boost infrastructure investment in India.