Finance Minister Arun Jaitley calls for more investment in infrastructure

NEW DELHI: Finance Minister Arun Jaitley has urged the industry to enhance investment in infrastructure sector over the next two decades, if India has to graduate into a middle income economy.
The FM pointed out that there is a requirement of a whopping Rs 50 lakh crore investment in the sector over the next five years and India has already spent Rs 60 lakh crore in infrastructure during 2007-17. Jaitley also pointed the government in Budget 2017 18 made allocation of Rs 3.96 lakh crore for the sector.

He highlighted that improved macroeconomic fundamentals have placed India on the growth trajectory of 7-8 per cent, but it still needs big investments in infrastructure. “We need a lot of investment and we will need a lot of spending,” Jaitley added.

Speaking at the 5th Annual Defence Estates Day lecture, Jaitley laid out the economic roadmap that India needs to follow to become a developed economy. Jaitley pointed out that the government has been increasingly raising allocation for development of infrastructure.

He reiterated that the investment in infrastructure helps in generating more jobs and more economic growth and improves productive capacity of a nation.

Jaitley said that India maintains a growth rate of 7-8 per cent and is already close to $2.5 trillion economy in terms of GDP. However, during the first quarter of the current fiscal, economy witnessed a growth rate of 5.7 per cent, the lowest in the three years.

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“Our statutorily fixed target is 4 per cent. We have been able to keep our current account deficit under control, and over the past few years India has had exemplary performance in terms of being able to bring down its fiscal deficit,” he said.

The net effect of all these is that India is getting closer to a situation where the country can spend what it earns, and borrows relatively less, Jaitley pointed out.

However, the adverse impact of tax non-complaint society can be felt in many areas, including investment in infrastructure, the FM said.

“One factor that has to be kept in mind as far as infrastructure sector is concerned is that infrastructure is created when users pay,” Jaitley said. And, “we cannot expect infrastructure to be created out of thin air... Users have to pay for it,” he added.