Rs 1 lakh cr in infrastructure will be committed in 100 days

The Union Minister of State for Industry, Dr Ashwani Kumar, on Friday said that investments worth Rs 1 lakh crore in infrastructure projects will be committed in the next 100 days.

Speaking to newspersons of The Hindu Group of Publications about the efforts to rev up the economy, Dr Kumar said that the Government has decided to provide a grant of 90 per cent of cost of purchase of 40,000 commercial vehicles by the various State transport undertakings.

In addition, the interest subvention promised for middle income and low income housing will boost housing construction.

Dr Kumar said that the construction industry is serviced by 42 other industrial sectors, such as steel, cement, wood and hardware.

These sectors account for employment of around 32 million people.

The aim of the Government is to protect these jobs and to boost the morale of people, so that consumption and demand are revived.

He said that the Government would not hesitate to use sovereign guarantees to fund infrastructure. (Incidentally, the Deputy Chairman of the Planning Commission, Mr Montek Singh Ahluwalia, also said the same on Thursday.)

He said that eventually, the stimulus packages would lead to investments of Rs 3 lakh crore.

Asked how the Government would fund these packages, Dr Kumar said they would be funded out of deficit financing.

“Fiscal deficit will go up. We are prepared psychologically. Fiscal deficit needs to be under control as a prudent economic measure.

“However, an extraordinary situation calls for an extraordinary response. This is an extraordinary situation,” he said.

Asked what might be the impact of the friction with Pakistan, in the aftermath of the Mumbai terror attacks, on India’s economy, Dr Kumar said that no conflict situation would ever augur well for any economy.

Economic growth and peace are “integral to each other”.

However, he said that the Government would deal strictly with Pakistan.

“India is a peace loving country and has never believed in conflict as a solution. However, India has the requisite will and power to defend itself against attacks on the country,” he added.

http://www.thehindubusinessline.com/2009/01/10/stories/

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Rs 1 lakh cr in infrastructure will be committed in 100 days