The Centre was committed to boosting public spending on infrastructure in the coming years so that allied sectors such as cement and steel get a boost, leading to greater employment generation, Union Minister of State for Commerce and Industry Nirmala Sitharaman said during the ‘Resurgent Rajasthan Partnership Summit’ here on Friday.
In a veiled attack on the critics of the government, Ms. Sitharaman said Prime Minister Narendra Modi has been making several trips overseas to lift India’s image, which, she said, had taken a beating during the last few years before the NDA came to power.
An improved image would help the country attract greater foreign investments, increase manufacturing and create more jobs, she added.
Opposition parties, including the Congress, have been criticising Mr. Modi’s frequent foreign trips -- numbering around 30 in the 18 months he has been in power -- by dubbing him an “NRI Prime Minister.”
Mr. Sitharaman’s comments on increase in public spending on infrastructure assume significance because some analysts apprehend that owing to the Seventh Pay Commission recommendations and the consequent increase in the Centre’s wage bill in the next financial year, as well as due to the expected reduction of corporate tax rates, the government could be forced to bring down public expenditure (including in infrastructure) in the coming years to reduce the fiscal deficit further.
They have warned that it will not be an easy task for the government to reduce the fiscal deficit to 3.5 per cent of GDP in FY17 from 3.9 per cent in FY16, especially with a higher wage bill and while maintaining the level of public expenditure.
Higher salaries to government employees and pensioners from January 2016 onward, thanks to the Pay Commission’s suggestions, are aimed at increasing consumer demand and in turn in economic recovery. But this will bloat the government’s wage bill in the coming year by an estimated Rs 1.02 lakh crore or around 0.65 per cent of GDP, a factor likely to cause difficulties in bringing down fiscal deficit to 3.5 per cent in FY17, analysts have said.
Meanwhile, Ms. Sitharaman reminded Chief Minister Vasundhara Raje of the importance of the Delhi-Mumbai Industrial Corridor , of which close to 50 per cent falls in Rajasthan. Ms Sitharaman said the corridor would be a major boost for businesses.
The Minister announced that the Central government would set up a centre of the National Institute of Design at any place in Rajasthan that Ms. Raje suggests.
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