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Poor pvt investment worries govt

INADEQUATE PRIVATE sector investment in the State is causing concern both in the Government and industrial circles. In the 10th Plan, which is nearing its end, the private sector investments are hardly of Rs 2.57 lakh crore against the State Government target of Rs 3.65 lakh crore.

india Updated: Apr 27, 2006 01:22 IST

INADEQUATE PRIVATE sector investment in the State is causing concern both in the Government and industrial circles. In the 10th Plan, which is nearing its end, the private sector investments are hardly of Rs 2.57 lakh crore against the State Government target of Rs 3.65 lakh crore.

Interestingly, most of the investments are not in the sectors where the State Government wants them to invest, as their first priority is profit and not welfare of people or the government’s concerns or priorities.

It is also strange but true that so far there is no mechanism at any level in the Government to know the exact amount invested by the private sector and the investment is being calculated on assumption only.

Meanwhile, the Government is contemplating to amend the terms and conditions of providing subsidies worth Rs 20 lakh and Rs 40 lakh for setting up intermediate and degree colleges respectively in the State. Now, it plans to give subsidies in proportionate to the money invested on the colleges instead of giving flat subsidies.

According to a paper prepared by the Government for establishing the ‘Viability Gap Fund’ on the lines of a Central scheme, the Government has not yet defined its priority sectors in which it wants the private sector to invest and as such there is hardly any investment in the Government priority sectors like infrastructure including roads, bridges, energy, labour, water supply and social sector.

However, Chief Minister Mulayam Singh Yadav has agreed in principle to set up the Fund to attract the entrepreneurs.

It is noteworthy that the Government has failed to submit any proposals to the Centre to avail huge amount from the Centre under its ‘Viability Gap Fund’ plan.

The proposed Fund could prove to be a boon for strengthening various important but neglected sectors including agriculture, tissue culture, integrated pest management, food processing, veterinary colleges and medical and health.

“The need of the hour is to give subsidies to the private sector in such a way that they are attracted to the priority sectors,” the paper said.

The UPDC, set up ostensibly to promote private investment, has also failed to do much as nothing concrete has come out by its efforts barring the Dadri Project though it is yet to take off due to some teething problems.

First Published: Apr 27, 2006 01:22 IST