Concerned over slow growth of manufacturing sector, Finance Minister Arun Jaitley today promised to step up public spending on infrastructure, ease entry barriers for overseas investors and push Goods and Services Tax (GST) to boost economic expansion.
He also pitched for a low interest rate regime and defended the land acquisition bill saying it would benefit the rural India by promoting industrial activity in non-urban centres.
"Historic opportunity has revisited (us) and we have to use it to the maximum," Jaitley said while addressing investors at 'The Growth Net' conference.
The Minister expressed the hope that the constitutional amendment bill to roll out the GST, new indirect tax regime, would be passed in the next leg of the budget session beginning on April 20.
Once approved by Parliament, GST will subsume various indirect tax levies like excise, service tax and octroi.
Answering questions on the land acquisition bill, which is stuck in the Rajya Sabha, Jaitley said that the Union Cabinet would take a call on the issue as the Ordinance promulgated by the President on the subject is set to automatically lapse on April 5.
The Minister said that while the agriculture and services sectors have been doing well, "manufacturing is a challenge" and the government is trying to resolve the "legacy" issues hampering development of infrastructure sector
"Our manufacturing sector is challenging and it is here that we have to actually invent the key engine of growth. This is an area where countries which overtook us. China is an obvious example...
"Our concentration therefore is on 'Make in India', ability to try and device various methods of financing infrastructure...this is one are where we need to seriously concentrate on," he said.
The Finance Minister said he reviewed the progress of highway projects this morning.
"These are huge legacy issues. In the highways sector alone as many as 77 projects were stuck for want of one thing or the other," he said, adding that "now by resolving the issues 24 of them have taken off".
Referring to the defence sector, Jaitley said he was becoming a little optimistic because "a flurry of activities" is taking place in the sector.
"You see foreign investors partnering with domestic manufacturers, takeovers have started, large groups are now taking overs have started, large groups are now taking interests in entering that particular field," he said.
Earlier, he said only public sector units and some private companies were in the defence manufacturing. The new government has hiked the FDI limit in the sector to 49 per cent from 26 per cent.
"Therefore lot of liquidity getting into railways, highways, may be ports...," Jaitley said, adding that "I don't expect them (the private sector) to suddenly raise a fund and say I don't expect them (the private sector) to suddenly raise a fund and say I will build infrastructure.
"This is the first responsibility of the government particularly when you are trying to get out of the slowdown phase, we are quite conscious of that".
Jaitley said the government was committed to giving a push to infrastructure development.
"In my Finance Bill, there is a proposal to pass on a substantial part in terms of cess for highway authorities ... Rs 8 on that cess means Rs 80,000 crore for the National Highway Authority and part of goes into the railways also," he added.
Therefore, Jaitley said, with liquidity in the hands of highway authority, "incomplete projects can also be assisted by them through some fund mechanism".
The Finance Minister stressed that the government focus was to improve ease doing business in India.
"I mentioned about allocation of resources, resolution of disputes in government contract, bankruptcy law so that the exit itself becomes easier.
"In the ease of doing business there are some initiatives that are in pipeline from entry point to time gap between the entry point and actual start of business, to the enabling environment, the exit and to a non adversarial taxation regime," the Finance Minister said.