With investments in highways and power drying up, the government has decided to step in. "We are clearing up the mess in the coal and power sector.
For development of highways, we are diverting a part of the benefit from lower oil prices to National Highway Authority as the government funding," said Finance Minister Arun Jaitley at the Vibrant Gujarat summit.
Public investments to these sectors have been blocked in a big way, pointed out Jaitely.
"A highly adversarial tax regime has scared away investors and the government has no intention of using retrospective tax. It discouraged investors and brought a bad name for India", said Jaitley.
The government will remove bottlenecks for the industry, asserted the finance minister. Several steps taken in the last 10 years complicated the way of doing business, he said. The new company law itself is completely out of tune with what is required, according to Jaitley.
"We are also in the process of simplifying the procedures in areas like defence and rural infrastructure. Insurance FDI will raise the confidence of foreign investors", he said.
New suburban townships will help the rural migrants while industrial corridors will also benefit rural India, pointed out Jaitley.
They are essentially going to run through rural areas and generate employment in villages.
Land law amendments will not only aid development but also benefit the farmers, according to the finance minister.
The coal block reallocation will help power consumers and coal producing states like West Bengal, Odisha, Chhattisgarh and Jharkhand, said Jaitely, adding that the elected representatives from those states should be enthusiastic in supporting these reforms. The new NITI Aayog will ensure greater decentralisation of power, he said.
GST (goods and services tax) will become a reality soon as more states are enthusiastic about implementing it, Jaitley said. "It will turn out to be a win-win situation for both the states and the centre."
Banking sector reforms is the key priority of the centre. ''We have allowed banks to recapitalise. The government equity in PSU banks will come down to 52 per cent. The banks are given independence in management," said Jaitley.
With all these steps, the government expects the economy to move much faster. "The government had undertaken many reforms, but it will take some time to show results on the ground, said Jaitley.