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Government chalks out plans to kickstart economy

In a bid to pump-prime the economy now facing a slowdown, Union Finance Minister Yashwant Sinha on Tuesday met the RBI Governor Bimal Jalan and financial advisors of the ministries to consider measures to step up investment and curb government expenditure.

After a meeting with Jalan and expenditure secretary C M Vasudev, Sinha said: "Our first priority is to ensure that whatever has been provided in the Budget for capital expenditure is spent as quickly as possible to spur demand and growth."

"We are concerned about growth," Jalan said after the meeting without giving details about the measures the government or the RBI proposed to take to kickstart the economy.

Asked if the government was proposing to provide additional allocation for investment, he said, "We will cross the bridge when we come to that."

Earlier in the day, Sinha had a two-hour meeting with financial advisors of various ministries to devise ways to bring about a turnaround in the economy.

He wanted all the ministries to ensure that capital and productive expenditure was encouraged, while revenue expenditure was 'restricted and controlled'. Without giving details, Sinha said that the government had already taken measures to spur investment and series of meetings have been held over the last few days.

Voicing concern over the slowdown, Sinha said that he was disappointed over the recent GDP growth figures projected by the Central Statistical Organisation.

He said that as the government was borrowing money at a high cost, it was necessary to ensure that it was utilised in a constructive manner.

He also wanted the ministries to ensure proper spacing of expenditure. This was important for more systematic management of expenditure and to avoid a situation wherein bulk of the expenditure takes place in the last quarter of the year.

Asking financial advisors to carefully scrutinise non-plan expenditure, Sinha said that they should evolve a definite system of a quarterly review of expenditure projections for proper management.

He said that many agencies have huge unspent balances of plan funds and this should be monitored on a monthly basis.

"It is very distressing if the money supposed to reach the people of the country goes from the Centre just gets deposited with these agencies," he said.

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