Chennai: Finance Minister Nirmala Sitharaman on Tuesday said the Central government will start funding infrastructure projects once the task force on the matter submits its report.
She also said the government is talking with representatives of industrial sectors across the country and is ready to address their issues.
Consumption will increase when the government starts spending on infrastructure, Sitharaman told reporters here, while highlighting the achievements of the first 100 days of the second government at the Centre led by Prime Minister Narendra Modi.
Sitharaman said the government has announced that it will spend Rs 100 lakh crore on infrastructure projects.
According to her, a task force is in the process of identifying the infrastructure projects to be funded, as well as expedited.
Queried about the dip in the growth of Gross Domestic Product (GDP) in the first quarter ended June to five per cent, Sitharaman pointed out that such dips and highs had happened in the past as well.
She said the GDP increases sometimes and dips sometimes, and the government is working to increase it.
To another query, she pointed out the need to widen the Goods and Services Tax (GST) basket, on which both Central and state governments need to discuss.
Asked about the reduction in GST demanded by several industry sectors, Sitharaman said she could not comment on what the GST Council would consider.
Nirmala Sitharaman also added that the Automobile industry is now affected by BS6 and the mindsets of millennial, who now prefer to have Ola or Uber rather than committing to buying an automobile.
Listing out the measures taken by the central government to alleviate the problems faced by the automotive sector Sitharaman also said the sector did have several years of the uptrend.
On the rationale behind the recent decision on merging various public sector banks, Sitharaman said there are banks that get funds in the form of savings but do have demand for credit, while other banks have a higher demand for credit but their savings are less.
The banks having a higher demand for credit have to borrow money to lend, which in turn increases their cost of funds and the lending rate.
In this regard, Sitharaman also said that banks have to grow bigger along with economic growth to meet the increased demand.
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