Sandeep Dikshit in New Delhi
Union Minister Rao Inderjit Singh is confident of a reversal because of the precedents. According to him, in 2008-09, the GDP slid to 3.9 per cent but the next year, it rose to 8.5 per cent. In the second quarter of 2014-15, the GDP growth rate was 8.7 per cent. In the third quarter, it came down to 5.9 per cent but rose to 7.1 per cent in the fourth quarter.
The government has ticked all the boxes, barring the one relating to investments in infrastructure. When the cost of shipping a container from India is double to that of China, any talk of luring companies from there appears premature.
Centre takes the first major step on December 15 when Sitharaman announces 10 mega projects. Going by previous announcements, each will be above Rs 100 crore and could be either completely new or brown-field projects. This first tranche of announcements is part of PM Modi’s statement from the Red Fort this year to invest Rs 100 lakh crore over the next five years. The opening of the UPA’s initiative of two trans-India high-speed goods corridors in a couple of years should smoothen both inter and intra country transportation. The drag though is in four areas:
But the channelling of credit has been more than generous. Public sector banks disbursed about Rs 5 lakh crore in October and November; barring this time, RBI was on a rate cutting spree, the housing sector has been given a helping hand, the banks and NBFCs have been recapitalised. North Block should be expecting better results in the third quarter; these could be announced in mid-February. The reprieve though will be bought with the risk of sinking public sector banks into another NPA crisis if the structural problems remain.
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