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Indian Finance Minister Wants Public Sector Firms to Invest $11.03 Bln to Boost Economy

CC0 / / India's Goods and Service Tax Revenue Close еo Pre-Covid Levels, June Revenue at $12 Billion
India's Goods and Service Tax Revenue Close еo Pre-Covid Levels, June Revenue at $12 Billion - Sputnik International
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New Delhi (Sputnik): On 12 May, Indian Prime Minister Narendra Modi unveiled a $266 billion stimulus package to help the economy and businesses overcome the challenges posed by the pandemic. Economic growth slid to a 12-year low of 3.1 percent in the first quarter of 2020.

Claiming that the public sector could help the economy recover from the impact of Covid-19 "in a ‘big way" Indian Finance Minister Nirmala Sitharaman has directed state-owned companies to invest $11.03 billion by September.

There are 23 Indian public sector enterprises in India under the various ministries, and Sitharaman has asked them all to finalise a plan of investment and share it with the ministry of finance.

According to the finance ministry, Sitharaman has also asked senior civil servants to closely monitor the progress of the investment plans.

Sitharaman underlined that Central Public Sector Enterprises (CPSEs), companies which are majority-owned by the government, have an important role to play in returning the Indian economy to growth. 

Total capital investment from the CPSE's is seen at $22.06 billion for the current financial year.

“CPSEs need to perform better to achieve targets and to ensure that the capital outlay provided to them for the year 2020-21 is spent properly and within time”, Sitharaman said.

“Better performance of CPSEs can help the economy in a big way to recover from the impact of Covid 19,” she added.

Sources have revealed that the public enterprises will identify the projects and finalise the investment plans within a week before sending them to the ministry of finance for approval.

With growth projected to be badly hit due to the pandemic, the country is seeking ways to boost investment and encourage consumption.

India's economic growth was slowing down even before the pandemic hit. From a high of over 8 percent in early 2018, the growth rate dipped to 3.1 percent during the first quarter of 2020.

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