Investing huge sums into top quality infrastructure will lead to a high trajectory of growth, but it is a difficult choice to make if resources are scarce, the Chief Executive of the government think tank NITI Aayog, Amitabh Kant, told NDTV.
The government has been battling criticism over rising fuel prices and runaway inflation. Mr Kant, on whether the tax structure on these essentials needs to be rationalised to bring relief for people, pointed out that an ideal pace of tax collection must remain to ensure there are enough resources to be pumped into reviving the economy amid the COVID-19 pandemic.
“There is a dilemma before the government. One of the key challenges is that if you want to get into high trajectories of growth and if you really want to revive India’s economy, how do you accelerate the pace of infrastructure, how do you spend more and more?” Mr Kant told NDTV.
“And to my mind, the revival of India’s economy will be through putting more and more resources into good quality infrastructure and the focus has to be on creation of really top-class infrastructure, which will lead to job creation and that will lead to construction getting revived,” the NITI Aayog CEO said.
“And therefore, the dilemma is the government needs to raise resources. But if it doesn’t have resources, it will not be able to invest in infrastructure. That is a choice the government will have to make in due course,” Mr Kant said.
The wholesale price-based inflation eased marginally in June as crude oil and food items saw some softening in prices. But inflation remains in double-digit for the third consecutive month in June. The rising price of fuel is a matter of concern, say experts.
“The government has been able to provide food supply to 800 million people and during this period, it has ensured that the MGNREGA programme goes on effectively in rural areas,” Mr Kant said.
The Reserve Bank of India in its monetary policy last month kept interest rates unchanged at record lows and committed to maintain an accommodative policy stance to support growth. Retail inflation remained above the RBI’s comfort level of 6 per cent for two straight months at 6.26 per cent in June, data released earlier this week showed.