India needs Rs 50 lakh crore for infrastructure projects over five years, says FM Jaitley

Key Highlights

• The government is working on awarding 10,000 km national highway projects every year.
• India has standardised itself for 7-8% growth, Jaitley said.
• The government reassured that it has kept CAD and fiscal deficit under control.

Union Finance Minister, Arun Jaitley on Thursday at a press conference in New Delhi spoke about massive investments needed by the government for infrastructure projects in the country.

A whopping Rs 50 lakh crore would be needed for infra projects in the next five years, Jaitley said as per Bloomberg sources.

He also added that the government was in the process of awarding 10,000 km national highway projects every year.

Raising concerns over taxpayers, Jaitley said that tax non-compliance was an impediment to infrastructure development.

He also said that he is expecting National Investment and Infrastructure Fund to find critical infra to invest in. NIIF is currently in talks with many international investors for investment in the fund. Banks also have a lot of surplus cash which can fund infrastructure projects, he added.

On GDP growth speculation Jaitley said 10% GDP growth is a 'chellenging figure' and it won't merely depend on domestic factors alone.

India has standardised itself for 7-8% growth, Jaitley added.

Speaking about current account deficit that has been flagged as a matter of concern Jaitley said that the government has kept CAD and fiscal deficit under control.

Concerns regarding a slippage relative the government’s fiscal deficit target of 3.2% of GDP for FY2018 have been brushed off by the government.

“There are doomsday predictions currently that Government is going to have a big revenue slippage in FY18 which may impact the headline fiscal deficit numbers. However, such projections flunk the test of logical reasoning and are grossly misconstrued,” SBI said in a report dated October 23.

SBI said that there could be a shortfall of only Rs 1.1 lakh crore in the revenue receipts and the government would need to cut revenue ‘substantially.’

“The sharp surge in the current account deficit in Q1 FY2018 relative to Q1 FY2017 comes as no surprise, with the spike in gold imports prior to the introduction of GST responsible for half of this uptick,” ICRA said.

There has also been a lagged impact of the rupee appreciation that continue to linger.

“With the size of the current account deficit in Q1 FY2018 nearly as high as the FY2017 level of US$15 billion, ICRA expects the FY2018 deficit to double to around US$30-32 billion (1.2-1.3% of GDP). Nevertheless, this should be adequately financed through a resumption in NRI deposits, as well as healthy FDI and FII inflows,” ICRA added.

Also Read: Can the government ‘substantially cut’ expenditure to meet fiscal deficit target?