Rail, aviation to drive GDP: Finance Minister

Finance minister Arun Jaitley said on Tuesday that the government is considering to allow private players to manage smaller airports while railways will soon invite bids for modernisation of 400 stations.

Mr Jaitley said that the proposal to allow management participation of the private sector in some mid-sized and smaller airports is aimed at improving their managerial efficiency.

“The railways has now come on to directionally the right track. We are inviting the private sector including foreign investment into infrastructure... Very shortly, the railways is going to come up with its proposed bids for development of 400 railway stations in the country,” said the finance minister.

The government may also go easy on fiscal deficit target to increase public expenditure to boost economic growth.

“There is also a proposal to delay, by one year, a goal of lowering the fiscal deficit to three percent in 2017-18,” Reuters said quoting an official in the finance ministry said.

“The economy is still suffering from slack demand. It needs a conducive fiscal and monetary policy,” the official said.

There have been suggestions to the government to increase its developmental spending to boost the economic growth as the private sector is still saddled with debt.

Any relaxation in fiscal targets, however, will make it difficult for RBI to pursue its inflation-focused policy and will prevent any more interest rate cuts in the next financial year.