Pvt Sector Investment Hasn't Kept Pace With Public Expenditure: FM

Says greater access to China may help economy, but sense of caution would have to be built in

- RUCHIKA CHITRAVANSHI

India's private sector investment has not kept pace with the growing public expenditure, Finance Minister Nirmala Sitharaman said on Saturday. Healthy corporate balance sheets are sitting on passive investible funds, instead of companies engaging in capacity expansion, she said. Sitharaman stressed that growth was the topmost priority of the government. While stating that greater access to China may help the economy, she said a sense of caution would have to be built in.

Sitharaman was speaking at the launch of the book A World in Flux: India's Economic Priorities, co-edited by Professor Amita Batra of Jawaharlal Nehru University and veteran journalist A K Bhattacharya. The festschrift honoured economist Shankar Acharya, the longest-serving chief economist advisor to the government of India from 1993 to 2001.

In conversation with Bhattacharya, Sitharaman said that Press Note 3 had put restrictions on Chinese investments and various projects, especially in renewable energy, that were held up because of a lack of access to technical experts. Press Note 3, as part of India's foreign direct investment (FDI) policy, restricts FDI from certain neighbouring countries over national security issues.

"During the tariff war between the US and China, there was a lull... Now there is a call saying we need more access, and we need to have a lot more interaction, and possibly opening some windows. And that's not just from our side," Sitharaman said.

Last week, India resumed issuing tourist visas to Chinese nationals after a five-year hiatus. External Affairs Minister S Jaishankar also recently met Chinese President Xi Jinping during his two-day visit to the country to attend the Shanghai Cooperation Organisation (SCO) Foreign Ministers Meeting.