'Our commitment towards infrastructure investment is clear'

Finance and Corporate Affairs Minister Nirmala Sitharaman. Picture/Twitter Nirmala Sitharaman

Finance and Corporate Affairs Minister Nirmala Sitharaman on Friday said that the Central government is clear about its commitment towards infrastructure investment.

"Our commitment towards infrastructure investment is very clearly laid out," said Sitharaman while addressing media persons here. Earlier, she had said the Central government is pursuing disinvestment to inject greater transparency and discipline in loss-making public sector companies.

At the same time, funds raised by privatising state-owned firms will be used for creating and upgrading infrastructure across the country, which will stimulate consumer demand and create long-term assets.

Sitharaman said the listing of companies on stock exchanges disciplines a company, provides access to financial markets and unlocks its value. It also gives an opportunity for retail investors to participate in the wealth so created, she said while addressing industry leaders at a post-Budget interaction organised by the Ministry of Finance.

For the next financial year 2020-21, the disinvestment target includes Rs 90,000 crore to be raised from an initial public offer in Life Insurance Corporation (LIC) and a stake sale in IDBI Bank.

The government has been bullish on privatising loss-making companies like Air India while other companies can opt for strategic disinvestment or get listed to diversify ownership. The Centre is also expected to divest stakes in Bharat Petroleum Corporation Ltd (BPCL), Container Corporation of India, and Shipping Corporation of India (SCI) soon.

The aggressive disinvestment target is also the basis for the government to contain fiscal deficit at 3.5 percent of gross domestic product (GDP) in FY21. It had to let fiscal deficit slip from 3.3 percent estimated earlier to 3.8 percent in the revised estimate presented in the Union Budget 2020.

Besides stimulating the rural economy, said Sitharaman, the Budget lays a clear emphasis on commerce and industry with measures like staggering tax burden for start-ups.

"Budget 2020 sets a roadmap for the next five years keeping macroeconomic fundamentals in mind. We made sure that the demand for increasing consumption and investment in long-term asset building is taken up," she said.

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