Nitin Gadkari, the minister for road transport, highways, shipping and water resources, was at his candid self at the ET Markets pre-Budget meet on Friday, enumerating the Narendra Modi government’s mega investment plans to build the underpinnings of infrastructure aimed at kick-starting India’s new growth story. With the union budget round the corner, Gadkari spoke to industrialists, senior bankers and market mavensBSE -4.08 % on his strategy to spur the the rural economy, the importance of private investment in rural India and the agriculture sector’s potential linkage to the power and infrastructure sectors. He reiterated his conviction on cleaner, cost-effective fuels to save on import costs, which may be then allocated to villages. Edited excerpts from the conversation:
Q: There is some way the Eway bill can lead to a setback to this process, at least initially?
GADKARI: Every time you launch something new, there will be problems. The GST Council has considered and worked upon the majority of the demands from all stakeholders. It takes some time to settle the issues. Demonetisation and GST are big economic reforms. I feel that in due course of time, it will be win-win for all the stakeholders.
PAWAN GOENKA, managing director, Mahindra & Mahindra: Sir, we need immediately effective as well as long-term steps to uplift the rural economy. How do you balance that in the budget?
GADKARI: In rural and agriculture projects, we need government budget, but also private and public investment. Collection of biomass is a big industry. There is a surplus available. Collect it and transport it to the industry. We can initially start with 1,000 industries. Each one contributes Rs 200-250 crore. It will indirectly and directly give the industry at least 5 million new jobs. It is an import substitute, cost-effective and pollution-free. Here, we do not need any government investment. Maharashtra has a 5-6 megawatt solar power project, special agriculture feeder and it is assuring farmers that they will get power from morning 8 am to 5 pm. That power will only be used for irrigation. Maharashtra is losing thousands of crores of rupees because of subsidy. But solar power is available at Rs 3 per unit rate. Using that saves cost, saves subsidy and ultimately helps the farmer. Sagar Mala is a project of Rs 1.6 lakh crore. I have been assured that within two years, we will generate employment for 40,000 people. In the second phase, we will add another 60,000. Only in JNPT, we will receive an investment of more than Rs 1 lakh crore and give jobs to 1,25,000 youth of Maharashtra. Through several schemes under the Sagar Mala project, including the introduction of modern trawlers, fishing production can rise at 1 least by 5-6 times. So, these are aspects where identification of new fields can be helpful for rural, agriculture and backward regions.
Israel is supposed to be one of the best examples in progressive agriculture. We can work with them to increase production, exports and jobs in the rural and agriculture sector.
NILESH SHAH, managing director, Kotak MahindraBSE 1.16 % Mutual Fund: Sir, an Indian ship owner has to pay 5% GST for bringing his ship to India, but a foreign ship owner doesn’t have to. That is an additional tax burden to the former. Secondly, construction contractors have suffered a lot because of delays in projects and disputes where their working capital is locked. We will require your feedback on both these points.
GADKARI: The first point is correct. I called a meeting with (finance secretary Hasmukh) Adhia-ji and the ship-owner companies, and I conveyed to him that this is a problem. I am aware that the health of ship-owning companies isn’t good. I accept that we are still looking for good solutions for them.
Regarding road construction, when I had taken charge as minister, there were 403 stalled projects; the cost involved was ?3.85 lakh crore. I can claim that my department has saved Indian banks Rs 3 lakh crore worth of NPAs. And, why take bank loans? The National Highways Authority of India has a global AAA rating. I can raise more than Rs 10 lakh crore. My toll income is Rs 10,000 crore. We already have tender processes for monetising some eight to 10 projects, which will get me another Rs 1.25 lakh crore. I can take money from people like journalists, labourers and policemen and assure them 10-year interest rates of 8%, more than banks that are giving 6%. You can also invest in our ports.
SESHAGIRI RAO, joint managing director, JSW Steel: Sir, today demand is partially affected because of dues from the government — GST refunds, payments to contractors, or VAT refunds. Is there some simplification which can be done in the budget so that these can be expedited and demand stimulation can happen?
GADKARI : This is not related with the budget. I have just mandated that in Maharashtra, any contractor who is submitting 75% of his bill payment to the authority, has to be paid within 24 hours. I understand the meaning of working capital. The government servants never understand the value of money. They are people who get fixed salaries every month. They don’t understand the impact of interest costs. That is one of the reasons we are not paying money in time and why projects are delayed.
We are transparent, corruption-free and time-bound. But giving sanctioning claims and other things is a big problem. Once decided, I say I am not going to do it unless you receive judgements from a tribunal or court. I understand that my approach is not perfect, but I am helpless. My suggestion to my officers is “do not break the law; bend the law up to the last breaking point and try to help the investor and contractors.”
Q: You made this dramatic announcement that after 2030, only electric vehicles will be allowed…
GADKARI: I am giving priority to fuels such as ethanol, methanol, biofuel and electricity. It is my conviction. I am a nationalist. We are importing crude oil worth Rs 7 lakh crore, creating pollution.