In a bid to pump slumping growth rate, government is planning to fuel it with extra money that will come from nine major public sector undertakings (PSUs) that has a large cash reserves of Rs.1.80 lakh crore.
In this regard, government is working on a mechanism under which nine PSUs would start investing its cash reserves in infrastructure projects in a time-bound manner, informed Arvind Mayaram, Secretary of Department of Economic Affairs (DEA) in his address at Federation of Indian Chambers of Commerce and Industry (FICCI) auditorium.
"Finance Minister P Chidambaram will meet chairmen and managing directors of the PSUs Wednesday and fix the deadlines for the companies' investment," said Mayaram.
"The identified PSUs are sitting on cash reserves of Rs.1.8 lakh crore. The identified projects will soon be posed to the union Cabinet for time-bound implementation of the projects," he added.
He was addressing the national executive committee meeting of FICCI here.
Among other plans, Mayaram said the government would make a series of interventions to trigger growth in the economy like bringing on stream road and petroleum sector projects of Rs.1,000 crore or more.
In the next three months, a PPP (public-private partnership) framework will be put in place for creating warehousing facilities for food grains, entailing an investment of Rs.20,000 crore.
The DEA secretary said the government was aware of the lack of credit and that it was committed to ensuring early financial closure of large private sector companies.
"A slew of decisions have already been announced to ease external commercial borrowings and borrowings for Indian companies abroad would be made easier for retiring domestic loans."
Mayaram also said that steps were being taken to control the fiscal deficit.
"This would involve a little hardship across the board, from low-income to high-income earners. The pain of fiscal correction will be felt by everybody."
The key finance ministry official also urged the industry not to discount the good news on the economic front.
"The country had 80 million tonnes of food grain buffer which will be utilized to temper food prices; personal, home and vehicle loan disbursement have looked up and consumption remains strong.
"Even with a rate of growth of 6 percent, India remains a country with high growth and we must recognize this," he said.
--With IANS Inputs--
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