PM to ministers: Sink differences, boost investment
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CITING fuel supply arrangements, security and environmental clearances as "constraints" that deter investments in the infrastructure sector, Prime Minister Manmohan Singh Thursday indicated that the government will not shy away from tough and unpopular decisions despite general elections being due in 2014.
"I am aware that we are working against the political calendar, but we should not lose sight of the fact that we are also involved in the task of nation-building. Our responsibilities and our commitment therefore need to transcend other considerations," Singh told a meeting of the council of ministers, exhorting them to come to a common understanding on these issues.
Finance Minister P Chidambaram, who explained the macro-economic situation, is said to have told his colleagues that investments worth Rs 7 lakh crore were stalled due to bottlenecks such as land acquisition, environment clearances, sluggish bank financing and delays in state regulatory clearances, among others.
He emphasized the need to take "quick decisions" to fire the growth engines in the steel, power, road and coal sectors.
The PM's emphasis on the need for a common understanding to remove bottlenecks to investment came in the backdrop of inter-ministerial differences over the creation of the National Investment Board, including opposition by Environment Minister Jayanthi Natarajan. The PM said that during the 12th five year plan, the government has set a target of realizing nearly $1 trillion of investment in infrastructure.
"To do so, we will have to overcome the constraints that currently deter or slow down this investment...the growing gap between demand and supply of energy has emerged as a major constraint on our development," Singh said. "Of particular concern is the fiscal deficit, which is too high and acts as a deterrent for domestic and foreign investment. These issues have a rippling effect across the economy and on the work of many departments that are represented here."