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Sitharaman interacts with CMs, FMs to step up investment, growth
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SME Times News Bureau | 16 Nov, 2021
With a view to enhance the investment climate in the country in the wake
of strong recovery and the opportunities accorded by a shift in
geo-political realities post the Covid-19 pandemic, Union Finance
Minister Nirmala Sitharaman on Monday virtually interacted with the
Chief Ministers and Finance Ministers of all the states along with
Lieutenant Governors of the UTs.
The meeting was attended by the
Chief Ministers of Assam, Chhattisgarh, Goa, Haryana, Himachal Pradesh,
Karnataka, Madhya Pradesh, Manipur, Meghalaya, Mizoram, Nagaland,
Puducherry, Sikkim, Tripura and Uttar Pradesh, along with the Lt
Governors of Jammu and Kashmir, and Deputy Chief Ministers of Arunachal
Pradesh, Bihar, and Delhi.
State Finance Ministers of Andhra
Pradesh, Gujarat, Kerala, Odisha, Punjab, Rajasthan, Tamil Nadu,
Telangana, Uttarakhand, West Bengal; and state government officials of
Ladakh, Maharashtra, Jharkhand, Andaman and Nicobar, Chandigarh, Dadra
and Nagar Haveli and Daman and Diu, and Lakshadweep also attended the
meeting.
In her opening remarks, Sitharaman emphasised that the
economy has been growing significantly post the second wave of the
Covid-19 pandemic and indicators such as imports, exports, PMI
manufacturing, digital payments, etc. have already reached pre-pandemic
levels.
Sitharaman highlighted that with favourable
international perception of India's growth and in light of the
structural, sectoral abd financial reforms undertaken by the government
of India, global and domestic investors are upbeat about the investment
attractiveness of the country.
The states should leverage this opportunity to scale up investments and growth, she said.
The
Finance Minister also said that the government of India has taken
concrete steps to increase capital spending and drive an infrastructure
and investment-led growth.
Benefits of higher investment in
infrastructure manifest in the form of increased employment
opportunities, access to market and materials, improved quality of life
and empowerment of vulnerable sections, she said.
The Union
budget for FY2021-22 has allocated Rs 5.54 lakh crore capital outlay, an
increase of 34.5 per cent over last year. Additionally, around Rs 2
lakh crore allocation is for states and autonomous bodies for their
capital expenditure. Over and above this, a new incentive scheme was
launched by the government for states that could achieve at least 15 per
cent of the target set for FY21-22 by the end of the first quarter, 45
per cent by end of the second quarter, and 70 per cent by the end of the
third quarter.
States that achieve their targets become
eligible for incremental borrowing. After the end of the first quarter,
11 states got permission to mobilise an additional total amount of Rs
15,271 crore.
Sitharaman further said that the recently-launched
national monetisation pipeline includes only Central government assets,
while state assets have been out of its purview as of now.
The
minister suggested that there is a significant potentially monetisable
asset base in states which could be leveraged to enhance the capital
available for new infrastructure creation and other social sector
pressing priorities.
Sitharaman urged the states to help India
become the fastest growing economy in coming years, through facilitating
investment attractiveness and expediting ease of doing business
measures and undertaking power reforms with regard to reduction in
AT&C and ACS-RRR.
The Finance Minister further emphasised
that since in many cases land is one of the major bottlenecks for
project on-grounding, states must contrive to smoothen land acquisition
procedures and create land banks to be tapped at the time of investment.
She
urged the states to strengthen their urban local bodies (ULBs) in light
of the fact that there has been decidedly a larger allocation to ULBs
than earlier.
Since infrastructure projects require technical
assistance in addition to financial resources, Sitharaman said that the
line ministries and the Department of Economic Affairs would extend all
possible cooperation for technical or advisory assistance to the states.
Moreover, the viability gap funding provision will help finance
socially relevant but financially unviable projects, especially across
social sectors.
The Finance Minister said that she is looking
forward to listening from the states and understand their ideas and
plans in the direction of investment enhancement.
In the open
interaction, each of the states enumerated the list of reforms and
pro-active policies they are pursuing to establish good governance and
to facilitate investment.
Some of the ideas shared by by the
states to facilitate investment promotion during the meeting were:
Affidavit-based clearance system; Transparent mechanism for investment
facilitation that involves sharing with states; leads of prospective
investors who are in touch with the Centre etc.
The states also
emphasised the need for a clear-cut policy and SOPs on environment and
forest clearances by the government of India, on the lines of
'Eco-Economics', and more power to states under forest/environmental
matters.
The states also sought fast-track clearance and approval for the externally-aided projects by the government of India.
The
states also suggested the need for a legal reassessment and
intervention on the legality of conversion of several different types of
lands into industrial parks. They also said that there is a need to
strengthen the dispute resolution mechanism, post-award contract
enforcement etc.
The states sought continuation of the Centre's scheme of loan for capital expenditure beyond the current financial year.
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