Jaitley assures 'appropriate action' to tackle low-corporate investments

Said banks have done excessive lending in past and a proposal on their capital adequacy is on the table

Finance minister Arun Jaitley on Thursday told investors that the government would soon come out with a plan to address low corporate investment. 

"There is a problem of private investment and the government is seized of the issue. Soon, you will hear from us," Jaitley said at the investor summit organised by JPMorgan in New Delhi on Thursday.

Largely propped up by the government capital expenditure (capex), the gross capital fixed expenditure rose by 1.6 per cent in the first quarter of FY18 against the contraction of 2.1 per cent in the fourth quarter of FY17. 

According to Centre For Monitoring Indian Economy (CMIE), corporate capex has declined for five years in FY17. New project announcement by the private sector came down by 2 per cent in FY17 year-on-year.

Jaitley said, "We are analysing the economic indicators and appropriate action will be taken at right time."

He said remonetisation has been substantially completed. 

The decline of 5.7 per cent economic growth in Q1FY18 (lowest in the Narendra Modi-government's tenure) was partly blamed on lingering effects of demonetisation and de-stocking due to goods and services tax (GST) jitters. 

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 has pegged Rs 15,000 crore to come from strategic disinvestment.

He said in past few years, the market was volatile at times, so the government has to wait for the right time for divestment.

Jaitley also said as far as universal basic income (UBI) is concerned, he is personally in favour of it. "Only fear is the level of political maturity," he added.