New Delhi, Jun 6: Battling perception of policy paralysis, Prime Minister Manmohan Singh today set an investment target of at least Rs 2 lakh crore for core sector projects in the current fiscal in a bid to revert back to 9 per cent economic growth.
Holding a brainstorming session with his infrastructure ministers, he said after achieving remarkably high growth rate over the past 8 years India is “now running into more turbulent weather”.
“In these difficult times, we must do everything possible to revive investment and business sentiment, both public and private.
“We must work to create an atmosphere which is conducive to investment and to removing any bottlenecks to growth,” he told a meeting attended by ministers and officials of Power, Roads, Shipping, Civil Aviation and Coal besides Planning Commission Deputy Chairman Montek Singh Ahluwalia.
At the meeting ambitious targets were set for investments in ports and aviation sectors, power generation, coal production and railway freight carriage for 2012-13 which Singh said where achievable. He said he was encouraged by ministers' commitment to meeting these targets.
He said as the government was committed to taking measures to reverse the present situation and revive India's growth story.
“The global economic is passing through difficult times. This has affected us. It is therefore imperative to take measures to give a boost to our economy.
“The government is not only aware of the challenges but is committed to taking the necessary measures to reverse the situation and revive India's growth story. These will turnaround India and take it back to a growth path of 9 per cent,” he said. In the wake of global economic crisis, India's growth rate has been estimated at 6.5 per cent for 2011-12 and 5.3 per cent in the March quarter.
In this context, Prime Minister said infrastructure investments played a major role both in short and long run.
“Infrastructure needs over USD 1 trillion in the next five years. The government alone cannot invest this amount. Therefore, importance is being given to public-private partnership. Achieving targets in key infrastructure sectors is key to success and will inspire confidence about the overall economic growth rate,” he said.
The targets would be monitored on quarterly basis.
For the Ports sector, a target of Rs 35,000 crore investment was set for 2012-13, up from Rs 16,585 crore last fiscal.
A target of Rs 8,798 crore was set for aviation sector through PPP mode for 2012-13, an increase from Rs 4,877 crore last fiscal.
It was decided that two new aviation hubs would be created to make India a major transit point.
Railway Minister Mukul Roy did not attend the meeting. Talking about challenges, Singh said a “flight (of investment) to safety” was taking place globally as international economy was passing through difficult times with Eurozone being the cause of concern all around.
“Then there has been a persistent problem of rising international petroleum and commodity prices in the last few years. Domestically, rising demand, along with supply side bottlenecks have contributed to inflationary pressures,” he said, adding “these constitute formidable economic challenge”.
With the new targets being set in the infrastructure sectors, the Prime Minister said these are “ambitious and impressive”, showing a “significant scale-up over the earlier performances”.
Referring to the civil aviation sector, Singh said work will be awarded on three greenfield airports at Navi Mumbai, Goa and Kannur and new international airports at Lucknow, Varanasi, Coimbatore, Trichy and Gaya.
Also, two new airline hubs will be created at Delhi and Chennai in the current fiscal, “making us a destination as well as a transit point”, he said.
The meeting decided that work on Itanagar airport would be commenced with a total investment of Rs 2100 crores by Airport Authority of India.
By the end of next month, additional PPP projects would be finalised for 10-12 existing airports and for 10-12 greenfield airports. These would be awarded during the year.
PPP in airport operations would be explored. The Prime Minister said that the government has to act on multiple fronts to achieve the targets and vowed to “do all that is required of us”.
In the short-term, he said, infrastructure development would boost investment rates across the economy and in the long-run, it would remove the supply constraints that affect industry and trade.
“The needs of the infrastructure sector are vast - over USD one trillion in the next five years. The government alone cannot invest such huge amounts and therefore it is important that we involve the private sector in our efforts, through Public Private Partnerships,” he said, admitting that targets were indeed “certainly ambitious and impressive”.