FM seeks more investment

Finance minister P. Chidambaram said that India will have to invest eight per cent of the GDP in infrastructure over the next five years from the present 4.6 per cent, if the economy is to grow by nine per cent a year. He told the Parliamentary consultative committee attached to his ministry that the gross capital formation in infrastructure as a proportion of GDP has remained at around four per cent from 1997-98 to 2003-04. The finance minister said that our infrastructure deficiencies have become more visible because of high growth. “The most visible indicators of over stretched infrastructure are India’s congested highways, airports and ports,” he said.
Mr Chidambaram said that the Planning Commission has estimated that investment in infrastructure will need to be Rs 14,50,000 crores during the Eleventh Plan period. He said that the power sector will need an investment of Rs 6,16,500 crores, railways Rs 300,000 crores, national highways Rs 220,000 crores, civil aviation Rs 40,000 crores and ports Rs 50,000 crores over the next five years. The finance minister said that some 40,000 km of highways need to be developed by 2012 and ports need to be developed to meet the projected capacity requirements at 1500 MT. He also said that 60,000 MW of electricity needs to be added to the power generation capacity during this period.
He said that the investment requirements are enormous and cannot be met from the public sector alone. “Therefore it is imperative to explore avenues for increasing investment in infrastructure combining public investment, public private partnerships and occasionally, exclusive private investments,” he said. The minister said that the public private partnership approach is best suited for the infrastructure sector. “In addition to freeing government resources to expand investments in other sectors, PPPs bring in private sector expertise, efficiencies in operation and maintenance leading to better public services delivered,” he said.