Determined to shed the charge of policy paralysis, the finance ministry on Tuesday took a slew of decisions like conducting road shows abroad to showcase India as a lucrative investment destination.
The ministry, at a meeting here chaired by Economic Affairs Secretary R Gopalan, also decided to monitor the progress of 10 to 15 big public sector infrastructure projects. The decision assumes importance since infrastructure is construed as a big bottleneck in the way of sustaining high economic growth.
The decision to this effect came on a day when eight core industries growth fell to an 11-month low of 3.5 per cent in August.
On Tuesday’s meeting of finance ministry officials, while taking forward suggestions of a meeting of India Inc with Finance Minister Pranab Mukherjee and Commerce and Industry Minister Anand Sharma last month, also decided to have a meeting with some of leading players on boosting the corporate bond markets in India.
Finance Ministry officials will now meet secretaries of 11 important ministries like civil aviation, coal and mines, commerce and industry, communication and IT, agriculture and, environment and forest tomorrow so that suggestions put forward by industrialists at the last month meeting could be implemented expeditiously. Then Finance Minister Pranab Mukherjee will hold a meeting with his cabinet colleagues of these ministries after Durga Puja, which would end on October 6.
Talking about the road shows, a finance ministry official said, “when interest rates are near zero in (developed) countries, we should try our best to attract funds.”
The proposal for road shows came amid the government streamlining policies to attract greater investment from abroad. Earlier, it had liberalised external commercial borrowings, allowed individual investors from abroad to invest in mutual funds, liberalised infrastructure bonds scheme for foreign institutional investors.
Yesterday, the finance ministry also talked of considering reduction in securities transaction tax on stocks in both spot and derivate segments and reducition in stamp duty on future and options and currency derivatives.
On the monitoring of big public-sector infrastructure projects, the official said the projects were yet to be identified. “But, it is important that infrastructure develops at a faster pace. We will be closely monitoring 10-15 large projects.”
Ministry officials also deliberated on the steps required to make the corporate bond market more vibrant.
The official said there is no public primary corporate bond market in India with these papers being placed privately.
As various steps taken by the government failed to increase liquidity in the sector, strengthening of the corporate bond market could go a long way in financing infrastructure development in the country, the official said.
The finance ministry will hold a meeting on September 29 with Morgan Stanley,
ICICI Securities officials among others on the issue of boosting the corporate bond markets. Subsequently, it will also meet with officials of professional services firm Ernst & Young on the issue on October 7.
Some of the suggestions given by industrialists last month included enhancing External Commercial Borrowings limit, increase in ceiling for automatic approval for infrastructure, making the bond market more vibrant, addressing the issues in the supply chain, and a single-window clearance for environment- and forest-related issues.