In this edition of Going for Growth we are in conversation with the CEO of NITI Aayog, Amitabh Kant, on a bunch of issues that NITI is currently working on.
Kant shared his blueprint for growth and spoke about immediate targets for railways, private participation in its development and how in general India could bolster its credit growth.
Speaking bringing private investment into railways he said, "We have had a series of meetings and we have finalised an entire process of bringing in private sector participants in the operation of about 150 trains. The routes, the train sets, have been identified and the concession agreements have all been structured."
He further elaborated that this might be India's most unique opportunity of bringing in private sector players into train operations.
"A lot of homework has been done around this so that it is a win-win situation. The next step would be to rollout the RFP, RFQ which should be done within the next 10 days," he explained.
On credit growth, he said that it is important that the private debt to GDP ratio should rise.
"Government expenditure is important but the government has FRBM limits and the government has to be disciplined about its expenditure because if it does more borrowing it overcrowds the private sector and the private sector is then not able to borrow," he said.
Kant stressed that the real potential for India's growth over the next three decades is about private debt to GDP ratio which is extremely low currently.
"When countries like South Korea, Taiwan, China, Japan were growing their private debt to GDP ratio was growing at very high rates. My belief is that the country needs to grow on the back of the private sector. The private sector brings in efficiency over a period of time and therefore the massive potential for India is really on private debt to GDP ratio and this would require our banking system, our NBFCs, and our HFCs to fire on all engines," Kant said.