The top brass at the Finance Ministry went well prepared to present the fiscal stimulus plan to rev up the economy in its first meeting with Prime Minister Manmohan Singh since he took over the finance minister’s portfolio yesterday. According to finance ministry officials, a special Rs 50,000 crore or more fund was being put in place with the Reserve Bank of India, Sidbi and the National Housing Bank chipping in. “This will be invested in infrastructure projects in the coming months,” an official told The Indian Express.

The ministry is also working on a proposal to let a significant portion of the $3 billion of extra funding promised by the World Bank to flow into state-owned banks as tier II capital. Banks can then leverage this to increase manifold their lending to the infrastructure sector.

The officials said given the fact expenditure in new infrastructure projects will take time, the priority was to increase the spend in ongoing projects. “We can double the expenditure on projects under way,” an official said.

The Planning Commission is also expected to submit a detailed plan for increasing investments in the infrastructure sector. Montek Singh Ahluwalia, Deputy Chairman, Planning Commission, said the plan would be submitted during the week.

In a statement later in the day, the finance ministry said Manmohan Singh called the Finance Secretary and other secretaries today after assuming charge of the Ministry. “They (secretaries) briefed him on issues of importance in the current context specially those relating to the economic slow down that have been engaging the government's attention.”

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