New Delhi: Housing, irrigation and roads are among the key sectors that the Planning Commission has identified as areas that could soak up large amounts of investment as the government looks to offset a liquidity crunch and jumpstart the Indian economy.
“This is the time to use counter-cyclical investment in infrastructure. That is the major change in policy that we should be focusing on right now,” said the apex plan body’s deputy chairman, Montek Singh Ahluwalia, at a conference of economic editors here on Tuesday.
Ahluwalia said the government is working on a set of measures, both budgetary and short-term, to offset the effect of the global slowdown and the ensuing liquidity crunch on the country’s mammoth infrastructure plans. Short-term measures, especially for projects that are already sanctioned or currently being tendered, will be presented to Prime Minister Manmohan Singh, who is also the chairman of the Planning Commission, he said.
Changing focus: Planning Commission’s Montek Singh Ahluwalia. Ramesh Pathania / Mint
“I think Montek Singh and his friends would be better advised fixing day-to-day problems rather than making policy announcements because the policy has already been made. This year, for example, has been a complete washout as far as road projects are concerned, not because of financing or anything, but because of procedural issues. They should try and fix that,” said Amrit Pandurangi of consultant PricewaterhouseCoopers.
Dinesh Rai, secretary, ministry of micro small and medium enterprises, separately said that a committee of secretaries has been formed to recommend a financial package for small and medium enterprises (SMEs) as well.
Rai, speaking at a conference organized by the Confederation of Indian Industry, or CII, in Delhi, said the Reserve Bank of India is expected to meet this week to announce major concessions for SMEs, which represent 45% of the country’s total manufacturing output and employs 42 million people.
(Maitreyee Handique contributed to this story.)