Govt to soon announce steps to boost investments: Sharma

The government is likely to announce major decisions in the next three weeks to boost investments and revive economic growth, Commerce and Industry Minister Anand Sharma said on Thursday.

New Delhi: The government is likely to announce major decisions in the next three weeks to boost investments and revive economic growth, Commerce and Industry Minister Anand Sharma said on Thursday.

"What can be done is under active consideration. You can expect some firm steps taken by the government. There have been consultations among senior secretaries of the concerned ministries and departments and also between key ministers and the Prime Minister," Sharma said.

He was speaking to reporters after holding a meeting with industry leaders from CII and Ficci.

".... We hope that in the next three-weeks, there will be decisions by the government which will bring a positive improvement," the Minister said.

Sharma said the industry has raised issues related to cost of credit, reduction in capacity addition and matters related with foreign direct investment.

"There is a sharp concern about the decline in industrial production particularly in the manufacturing sector. We know that there are strong head winds and a conscious effort has to be made...I will urge the RBI to take an early view on cost of credit for industry," he added.

Worsening economic situation has pulled down the index of industrial production by 1.8 percent in June, third fall in four months.

"Though inflationary pressure is there but depreciation of rupee also adds to that pressure. The economic activity has to continue. Cost of credit has to be made available and it has to be affordable...In the rest of the world, the cost of credit has been brought down," Sharma said.

The Minister said the industry has also raised problems related with land acquisition.

"In the new Land Bill we have already registered this issue that the manufacturing zones, DMIC and SEZ have to be included in what is described in public purpose," Sharma added.

CII former President Sunil Munjal said there is need for urgent steps to improve investment climate in the country.

"Unless some quick action is taken, the slowdown may continue or even get worsened because global slowdown is not showing any type of improvement," Munjal said.

He also suggested the government to reduce subsidy bill and incentivise investments for capacity addition and job creation.

Hit hard by global woes and domestic problems, India's economic growth rate slowed to a nine-year low, both in the March quarter at 5.3 percent as well as in 2011-12 at 6.5 percent.

It was the fourth meeting of the government-industry task force which was constituted in July last year.

Besides, industry leaders, secretaries participated in the meeting include Department of Industrial Policy and Promotion, Revenue, Commerce, Environment and Forest and Labour.

Sharma said that industry leaders have also raised the issue of rationalisation and simplification of procedures to set up units.

"To a large extent that has been done so that the timeframe for starting up (an unit) after the mandatory approvals are compressed, which in India has been fairly high. That has been done both for National Investment and Manufacturing Zones (NIMZs) and Delhi-Mumbai Industrial Corridor Project (DMIC)," Sharma said.

Ficci President R V Kanoria said the government should ensure a political consensus and tackle uncertainties dogging the economy in earnest.

"The government should bring down interest rates as public financing of fiscal deficit is crowding out private investment. They should ensure competitiveness by bringing in GST as the levy is a self-policing mechanism as well as a stimulus," Kanoria said.

Kanoria also asked to re-introduce investment allowance, abolition of minimum alternate tax on infrastructure projects and allowing access to pension and insurance funds for infrastructure development.