'$492 Bn needed to fund India's infrastructure'

Wednesday, 26 September 2007, 07:00 Hrs   |    3 Comments
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New York: India requires $492 billion to fund its infrastructure needs and that is possible only with the participation of private and foreign players, Planning Commission Deputy Chairman Montek Singh Ahluwalia has said.

"Investment by public and private sector in infrastructure is one of the key pillars of India's economic reforms," Ahluwalia said during a discussion at the "India@60: A New Age for Business" conference here.

"How can we raise this money from debt markets? It is a challenge that we have paused," Ahluwalia told the conference, co-organised by the Confederation of Indian Industry (CII), the Asia Society and U.S. India Business group, Tuesday.

The Planning Commission, he said, had identified various sectors such as roads, ports, airports, irrigation and power for private and foreign players to enter and said that telecom sector showed how the private sector could spur growth.

He said the Planning Commission's calculations - part of a consultation paper - showed that in order to sustain a growth of 9 percent per annum over the next five years, the investment required in infrastructure would be $492 billion.

Of this amount, $240 billion would be raised as debt by private and public sector. Seventy percent would be accounted for by the public sector and the rest by the private sector.

"This will raise the amount of investment in infrastructure spending from the current 5 percent of GDP to 9 percent during the 11th Plan period (2007-12)," he said.

"We have sent the consultation paper to all ministries, including the finance ministry, for getting their views and hope to incorporate them in the 11th Plan document, which is expected to be approved by the third week of November."

Ahluwalia said it would also prove to be difficult to raise funds entirely from internal sources since India does not have a strong debt market. "You can raise it externally but the pressure would fall on the rupees," he said.

"We have not yet resolved the issue," Ahluwalia told the session that was opened by Madeleine Albright, former US secretary of state and now the principal of the Albright Group LLC.
Source: IANS
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