Rs 9 lakh cr booster for economy

New Delhi, October 25
Amid growing criticism of the government’s handling of the economy, the Modi government today unveiled a massive stimulus package to boost growth and jobs, revive private sector investments and assuage MSME concerns through a Rs 2.11 lakh crore bank recapitalisation and a Rs 6.92 lakh crore road-building programme, including Bharatmala. This is expected to create 14.2 crore man-days of jobs.
Finance Minister Arun Jaitley said the Indian economy was on a strong wicket with sound macro-economic fundamentals, yet some areas needed a boost. “The government has finalised a roadmap. The macro indicators remain strong. We want India to remain a high-growth country although when transformational reforms are undertaken there is short-term impact,” he said.

Through detailed presentations, Finance Ministry officials laid out macro economic indicators which, they said, were sound and that the India story was ready for a takeoff with GDP growth poised for a turnaround. The government, in the final lap of its term and under pressure to show results in growth and jobs, is clearly focusing on enhancing public spending to help lending for small businesses and to revive private sector investments.
The Finance Minister said the Cabinet had cleared an “unprecedented strengthening” of public sector banks with a Rs 2.11 lakh crore front-loaded recapitalisation to clean up the legacy of NPAs (non-performing assets). Credit growth was likely to take off through recapitalised banks. This would give a big push to MSMEs for jobs and growth.
Finance Secretary Ashok Lavasa said under an umbrella programme, 83,677 km of roads, entailing a capex of Rs 6.92 lakh crore, would be laid over the next five years.
Of this “Bharatmala Pariyojana,” to be implemented with an outlay of Rs 5.35 lakh crore, would generate 14.2 crores man days of jobs.
Funding for the programme would include Rs 2.09 lakh crore to be raised as debt from the market, Rs 1.06 lakh crore private investment to be mobilised through PPP and Rs 2.19 lakh crore to be provided out of accruals to the Central Road Fund (CRF), ToT monetisation proceeds and toll collections of the NHAI.
Lavasa said the total government expenditure this fiscal was Rs 11.47 lakh crore of the Rs 21.46 lakh crore budgeted for this financial year. Of the capital expenditure target of Rs 3.09 lakh crore, Rs 1.46 lakh crore had been spent. Central public sector units had spent an additional Rs 1.37 lakh crore of their target of Rs 3.85 lakh crore. Attacking the former UPA government, Jaitley said from 2008-2014, there was indiscriminate lending by banks, NPAs were hidden under the carpet and there was a three-fold increase in bank advances (to Rs 34 lakh crore).