Issue of low corporate investment to be addressed soon: Arun Jaitley

Govt to come up with a plan to address the issue of subdued private investment

Union Finance Minister Arun Jaitley said on Thursday the government would soon come out with a plan to address the problem of subdued corporate investment in the economy.

“There is a problem of (subdued) private investment. The government is seized of the issue. Very soon you will hear from us,” Jaitley said at an investors’ summit organised by JP Morgan in the Capital 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 2017-18, against the contraction of 2.1 per cent in the fourth quarter of 2016-17. 

According to CMIE, investments worth Rs 98,000 crore were commissioned during the quarter ended June 2017. 

This is substantially low, compared to the average commissioning of Rs 1.5 lakh crore worth of investment projects per quarter in the past several quarters. CMIE, however, added a caveat that the data for last quarter will be revised as more information becomes available. As a result, the estimate could go up to Rs 1 lakh crore. 

Jaitley said, “From day one, this is a proactive government. We are analysing the economic indicators, and appropriate action will be taken at the right time.” He said remonetisation had been substantially completed. 

The decline in economic growth to 5.7 per cent in the first quarter of FY18, the lowest in the Narendra Modi government’s tenure so far, was partly blamed on lingering effects of demonetisation and destocking due to 

the goods and services tax (GST) jitters. 

Jaitley said banks had done excessive lending in the past, and a proposal on their capital adequacy was on the table. 

He also said the government did not have any reservations about privatisation. Of the total disinvestment target of Rs 72,500 crore for the current financial year, the government has pegged Rs 15,000 crore to come from strategic disinvestment. 

He said markets had been quite volatile at times in the past few years, so the government had to wait for the right time for 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.