“We need to concentrate on pick up in two sectors — rural India and infrastructure. There is deficit of investment in these. Many areas of infrastructure have started moving. But India’s infrastructure deficit is still very large,” Jaitley said at the State Bank of India (SBI) Banking and Economics Conclave.
Along with the infrastructure, India also needs to concentrate on improving the health of the public-sector banks (PSBs), Jaitley said.
“We are looking at the banking sector. Fear of consequences sometimes delays resolution. PSBs are still constrained by old laws when it comes to resolution,” Jaitley said.
Speaking about the recently announced decision to merge the Railway budget with the Union budget, he said: “Railway budget had become a small percentage of Union budget over the years. There was a need for greater convergence between the two.”
The decision to merge the two budgets was mooted by Railway Minister Suresh Prabhu and endorsed by official think tank NITI Aayog — which also proposed the doing away of the distinction between plan and non-plan expenditure. The decision on the merger of two budgets will also save Indian Railways Rs 9,700 crore it pays as dividend to the exchequer.
“In the merger, however, the functional autonomy of the Railways will be maintained. The government will take an initiative to ensure there is a separate discussion on Railways during the Budget Session,” Jaitley had earlier said.
The Railways has seen a separate budget since 1924 when the British thought it necessary to focus on India’s most important infrastructure network. The Railways then accounted for 70 per cent of the total budget — now pared down to just 15 per cent, on an average, of the country’s overall budget, the size of which was around $300 billion for this fiscal.