Finance Minister Arun Jaitley has told investors that the government has taken stock of the problem related to subdued private investment and would soon come out with a plan to address the same.
"There is a problem of private investment. The union government has seized the issue. Very soon you will hear from us," Jaitley said at the investor summit organised by JP Morgan on Thursday.
Largely propped up by the government capex, the gross capital fixed expenditure rose by 1.6 per cent in the first quarter of the financial year 2017-18 against a contraction of 2.1% in the fourth quarter of FY17.
According to CMIE, investments worth Rs 98,000 crore were commissioned during the quarter ending on June 2017. This is substantially low compared to the average commissioning of about Rs1,50,000 crore of investment projects per quarter in the past several quarters. CMIE, however, added a caveat that the data for the June quarter will be revised, as more information comes to light. As a result, the estimate would go up to over Rs 1 lakh crore.
Jaitley said: "From day one, this has been a pro-active government. We are analysing the economic indicators and appropriate action will be taken at the right time."
He said remonetisation has been substantially completed.
The decline of economic growth to an all-time low of 5.7 per cent during the tenure of the Narendra Modi-led union government in the first quarter of FY18 was partly blamed on the lingering effects of demonetisation and the de-stocking of inventories on account the of the roll-out of the goods and services tax (GST) regime in July.
Jaitley said banks have done excessive lending in the past and a proposal on their capital adequacy is on the table.
The finance minister said the government did not have any reservations about privatisation. The government has pegged Rs 15,000 crore to come from strategic disinvestment, out of a total of Rs 72,500 crore that is expected to come from disinvestment.
He said in the past few years, the market has been quite volatile and so the government has to wait for the right time for the divestment.
Jaitley also said as far as the Universal Basic Income (UBI) is concerned, he is personally in favour of it. "The only fear is the level of political maturity," he added.
He reiterated that states have to find their own resources for farm debt waivers.