Modi pushes Niti Aayog to work out ways for private investment

New Delhi: Even as the BJP-led NDA government continues to deny charges of an economic slowdown, sluggish private investment in key infrastructure sectors like aviation, highways, shipping and power, has emerged as a major concern for it.

Facing criticism from within and the Opposition, Prime Minister Narendra Modi has asked the Niti Aayog to take immediate steps to revive private funding in the big ticket sectors.

The think tank has been tasked by the Prime Minister’s Office (PMO) to seek opinion of all ministries on giving the public-private partnership (PPP) model — which witnessed its halcyon days during the UPA-1 regime — greater push to propel larger private funding in various infrastructure projects related to the aforementioned sectors.

According to highly placed sources, the Niti Aayog has initiated deliberations with all stakeholders on the PPP model. Their opinions will be inculcated in a cabinet note which is to be prepared on PPP, with the aim of making it a significant policy initiative.

Under the PPP model, private investment in a project has to be more than 51 per cent, while the rest has to come from the government.

Not much private funding in infra
Though private investments are in place in various sectors, the inflows have not been satisfactory, resulting in a lot of discontent within the government. Aviation, shipping and the power sectors have seen a plateau in terms of private funding, which the Centre wants to bring to satisfactory levels.

The moniker PPP was propelled into limelight during the first term of the erstwhile UPA regime, when private investment poured into the railway and highway sectors.

While private investments have been flowing in, for the past several quarters now, they have seen a downward trend.

As per a survey, fresh fundings by the private sector in the FY17 grew at the slowest pace since 1992. In FY17, the combined capital expenditure by the country’s top 1,000 non-financial firms, in terms of revenue, was up by just 5.8 per cent. The previous low of capital expenditure growth was recorded in 1992.

It further said that fresh fundings from private entities stood at Rs 2.07 lakh crore in FY17. In FY16, private investments were worth Rs 2.9 lakh crore, while in FY14 these stood at an all time high of Rs 5.7 lakh crore.

Meanwhile in a related move to push growth through increased public investment, Union finance minister Arun Jaitley on Thursday met with top PSUs and asked them to not only complete their budgeted capital expenditure but also aggressively push capital expenditure in the interest of boosting investment in Indian economy.

Secretaries and senior officers from the 10 ministries and the heads as well as financial directors of the CPSUs apprised the finance minister that their capital expenditure programme for the current year are completely on track for achieving the capital expenditure of Rs 3.85 lakh crore budgeted in 2017-18.