Plan panel finalising list of projects

Even as India is preparing for 7 per cent growth rate in the current fiscal, the Planning Commission is finalising a list of infrastructure projects that will be funded through budgetary allocation in 2008-09. The idea is to have a ready list of projects that can be executed fast to increase government investment to boost the economy, if the current global financial crisis continues into 2008-09.

The list, which will be ready by January 2008, will have road projects that are outside what is being implemented by the National Highways Authority of India (NHAI), irrigation and low-cost housing projects. “If the world position continues to remain week, I would strongly favour public sector investment in 2008-09,” said Planning Commission Deputy Chairman Montek Singh Ahluwalia at the Economic Editors’ Conference today. He said the government was preparing itself for 7 per cent growth this fiscal, lower than the Reserve Bank of India’s (RBIs) projection of 7.5- 8 per cent. However, with inflation coming down, the central bank would have more freedom to change its monetary policy, he told reporters on the sidelines of the conference.

Indian economy, which grew in excess of 9 per cent for three years up to March 2008, was driven mainly by higher investment and savings rate. Investment rate, aided mainly by private sector investment, increased by 10 percentage points to touch 35.9 per cent in 2006-07, according to the Planning Commission data. However, the private sector investment is likely to slow down and the government need to speed up its investment either directly through budgetary support or indirectly through funding agencies, so that growth rate of Indian economy can be maintained at 9 per cent in the current Plan period.