New Delhi, Nov 19: As a contracyclical measure to ward off the the adverse of the global downturn on Indian economy, Planning Commission Deputy Chairman Montek Singh Ahluwalia on Wednesday, Nov 19 said the Commission will firm up an action plan in the next ten days entailing additional infrastructure financing of up to 150 billion dollars.
Dr Ahluwalia said it was initially targeted that 500 billion dollars would be spent for infrastructure development. However, financing arrangements had been worked out earlier for 350 billion dollars. Now the Commission is identifying new projects and seeing how existing projects with absorptive capacity can be accelerated.
The Report is to be submitted to the Apex Committee, headed by Prime Minister Manmohan Singh. The Committee, formed to protect the Indian economy from the global meltdown, is headed by key persons in the government. These include Finance Minister P Chidambaram, Commerce Minister Kamal Nath and RBI Governor D Subbrao, apart from Dr Ahluwalia.
Dr Ahluwalia said the Prime Minister was of the view that infrastructure development needs to be speeded up to accelerate growth. This will provide the requisite fiscal stimulus.
He said the projects that have been identified will fall both in the domain of Public Sector initiatives and those under the Public-Private Partnership (PPP) mode. It is a way of pump priming the economy, whose projected growth rate is now expected to be 7-7.5 in the current fiscal as compared to 9 per cent growth in the last four years.
He said if the funds for additional spending come by way of budgetary resources, then it would require another set of supplementary grants. However, the Commission was weighing options on finding ways and means of financing additional expenditure.
Dr Ahluwalia said a problem with infrastructure projects is the long gestation period for yielding returns, which are upwards of three to four months.
Dr Ahluwalia said the financing arrangements of Infrastructure Leasing and Financial Services Ltd(IL&FS) could be increased.
Similarly, banks could also provide additional financing.
Asked about the Apex Committees programme relating to stepping up of exports, Dr Ahluwalia said the Commerce Ministry is examining the issue. He said there are problems plaguing the exporting community which Mr Kamal Nath is looking at.
Mr Chidambaram has indicated that a separate meeting of the Apex Committee would be held relating to exports.