Unlock public funds to drive growth: PM Modi

With a sluggish manufacturing sector affecting the economic growth, Prime Minister Narendra Modi has expressed grave concerns at large amount of public money lying idle with financial institutions and public sector undertakings (PSUs), and is learnt to have directed top bureaucrats to come out with ways to unlock it as it will help generate the money flow and propel the economy.

According to highly placed sources, the Prime Minister is learnt to have directed finance ministry officials to come up with a roadmap to help move these funds so that it can be pushed down to benefit the common man. The possibility of blue chip PSUs coming up with special dividends in the near future, could be one of the options, they added.

Sources aware of the developments told this newspaper that in a meeting with secretaries of all central government departments called for brainstorming on issues of improving governance recently, Mr Modi is learnt to have spoken in detail about the issue of parking of funds, mainly public money, and how it needs to be tackled urgently.

He is said to have indicated that there seems to be no idea about the volume of such amount lying with states, banks, PSUs, corporations, and autonomous bodies.

The Prime Minister is said to have reiterated that the most striking aspect about parking of funds is that it is mainly public money, which is not being put to use for public good and therefore it needs to be urgently moved down the pecking order.

Though Mr Modi has not given any specific date by which the economic affairs department of the finance ministry is likely to submit a roadmap to the PMO on unlocking the public fund, sources pointed out that most probably the PSUs may be nudged to think of ways to do so.

The trigger behind the Prime Minister’s concern on the matter appears to be the sluggish growth of the economy, especially of the manufacturing sector, which in the past few months has slowed down and this has affected the overall pace of growth.

According to the Nikkei Markit India Manufacturing Purchasing Managers’ Index (PMI), which was released earlier this month, India’s manufacturing activity lost some momentum in September due to sluggish increase in new business inflows.

Though it said that manufacturing business conditions in the country have improved for the ninth straight month, this growth has been rather slow.