New Delhi, Nov 5 (UNI) Led by Private Equity (PE) funds from the US and European Union (EU), the country's investments in infrastructure projects will cross Rs 4,00,000 crore in the next five years -- about one-third of the total fund requirement, according to global consultancy firm Ernst&Young.
''Infrastructure is key to growth in emerging markets across the globe and private investors are eager to support to it. We expect private investments in infrastructure projects in India to cross the Rs four trillion mark (Rs four lakh crore) in the next five years,'' Ernst&Young Partner Kuljit Singh said here today while releasing a report - Investing in Global Infrastructure.
Private equity funds and other investors from the US and EU will take the lead in private infrastructure investments in the country, the report said.
To increase attractiveness of the sector there is a need for easing norms for capital (ECB restriction removal) and appropriate risk allocation and standardisation of contracts, the report said.
Return on infrastructure investment in India is around 14-20 per cent, which is equal to the return in developed countries but at a very low risk, Mr Singh said.
India plans to invest 475 billion dollars for developing infrastructure in the next five years, with power generation and roads alone requiring Rs 7.1 lakh crore, the report noted.
The government with its limited resources cannot meet this huge expenditure on its own and is looking for private-public partnership to meet the required investments, it said.
''India's capital needs are so great that it will require substantial private investments of about 100 billion dollars and that spells opportunity for global investors,'' Mr Singh said.
Despite lack of standardised procedures in attracting private investment, India is considered to be a good investment destination by the US and European investors, it added.