The government needs to improve its tax collections and rationalise user charges for services to generate resources for infrastructure investment even as the economy is showing signs of picking up, the Reserve Bank of India deputy governor Rakesh Mohan said on Friday.

The public sector savings, which were positive (2.5 per cent) 10 years ago is now negative, and tax to Gross Domestic Product ratio needs to be improved to generate resources for investment in infrastructure, Mohan said addressing a seminar on economic reforms organised by Confederation of Indian Industry.

Public investment in infrastructure projects has fallen due to fiscal stress (paucity of resources) and sectors like power are plagued by inadequate levy of user charges and theft, he added.

Later talking to reporters, Mohan said, "Investment demand is picking up, and this is partly contributed by the low interest rate regime".