Unlock public funds to drive growth: Modi

Prime Minister Narendra Modi has expressed concern at a large amount of public money lying idle with financial institutions and public sector undertakings (PSUs).

The rate of India's manufacturing activity was also slower in September compared to August.

Sources said Mr Modi has asked top bureaucrats to find ways to unlock public funds for smooth flow of money in the economy. They said Mr Modi has directed finance ministry officials to prepare a road map to help move the funds for the benefit of the common man.

One of the options is to let profit-making PSUs give special dividends in the near future, the source said.

In a meeting with secretaries of central government departments recently, Mr Modi raised the issue of parking of funds, mainly public money, people familiar with the matter told this newspaper.

According to sources, the prime minister pointed out that there seems to be no idea about the exact amount lying with the states, banks, PSUs and

Prime minister asks officials to come up with ideas to release idle public money lying with financial institutions

One way of doing this is to let some state-run firms give special dividends

autonomous bodies.

They said Mr Modi was aware 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.

Source said Mr Modi, however, has not given a deadline by which the economic affairs department of the finance ministry should submit a road map to the Prime Minister's Office on unlocking public funds. PSUs may be asked to think of ways to do so.

The trigger behind Mr Modi’s concern could be slow manufacturing growth, with the Nikkei India Manufacturing Purchasing Managers’ Index falling to 52.1 in September from 52.6 in August. An index above 50 means an expansion, while a reading below 50 shows decrease or contraction.