JOIN USDivert investment into domestic mart, PSUs told
Even as the demand for goods overseas drops off in the wake of slowing global economies, Prime Minister Manmohan Singh has asked Indian companies to channel their investment in domestic market and “re-ignite” growth in a slowing economy.
In a meeting with the chiefs of 25 public sector enterprises on Tuesday, who are sitting on a cash pile of nearly Rs 2.50 lakh crore, Singh asked the PSUs to use that surplus for their own benefit and the benefit of the economy.
“They should use it for driving investment, growth and jobs. Investing such cash surplus would help in re-igniting the growth impulses that are present in the economy,” the Prime Minister told the PSU chiefs in his first ever interaction with them in many years.
Singh noted that the investment rate in the country had declined due to the recent slowdown. As high investment is directly linked to high economic growth rate in the country, Singh said the investment rate should be stepped up by 37 per cent in order to achieve a growth rate of 8 per cent.
India’s investment rate has slipped close to 32 per cent in the past year from as high as nealy 38 per cent of gross domestic product in 2007-08. High investments had led to a high economic growth rate of over 9 per cent in that year.
The economic growth has, however, slumped to 6.5 per cent in the fiscal just gone by.
“We cannot be satisfied with the status quo. Our growth should be maintained at the level of 8 to 8.5 per cent regardless of what happens in the world economy. We must learn to swim and swim fast enough, whatever be the circumstances,” Singh told the CMDs of major Navratna and Maharatna PSUs.
The PSUs have major investment plans but have been complaining of delay in project clearances due to environmental issues. The Prime Minister impressed upon the need for improving coordination in expediting project clearances.
He asked the Minister of Heavy Industry & Public Enterprises and the Department of Public Enterprises to work with the Finance Ministry, Planning Commission and the National Manufacturing Competitiveness Council towards addressing these issues.
Separately, Finance Minister P Chidambaram asked the banks and financial institutions to make extra efforts in lending to the poor and deprived. Chidambaram said India’s poor are prompt in repaying loans and deserve more access to credit.