$331 bn needed in infrastructure over 5 years, says CII

New Delhi, Aug 6 (UNI) The investment in India's infrastructure needs to rise from a level of 47 billion dollars in 2006-07, to a level of 84 billion dollars by 2010-2011, an industry chamber said today.

This calls for a total investment of 331 billion dollars in the country's infrastructure over the next five years, as outlined by CII Infrastructure Council Chairman Vinayak Chatterjee.

According to a study conducted by the CII Infrastructure Council, there is need for evolving an agreed road map between the government, the states and the private sector, for drawing an overall investment plan in infrastructure.

An understanding of the total investment requirement, its break-up and also the time-frame, would enable the constituents especially the private sector to accept a target for bringing in its share of the total investment in the sector.

The study highlightes that India lags significantly behind the other east and south-east Asian economies, in its levels of infrastructure spending as a proportion of GDP.

While China spent 10.6 per cent of the GDP, India's capital spend on infrastructure was below 4 per cent in 2003. The disparity was even more stark in absolute figure terms, with China spending 150 billion dollars on infrastructure in 2003, against India's 21 billion dollars.

The Chamber appreciated the renewed thrust on infrastructure spend, in the approach paper to the 11th Plan Five Year Plan brought out by the Planning Commission. The Plan approach paper calls for the investment to increase from a current level of 4.6 per cent of the GDP, to between 7 to 8 per cent in the 11th Plan Period.

While the target of 8 per cent is still short of the 10 per cent figure which India needs to achieve, there is still a need for adopting a strategy in terms of how much would the government be investing and how much needed to be the share of the private sector, including also FDI in infrastructure, the Chamber said.

India's GDP which was at 718 billion dollars in 2005-06, is expected to grow at an average of 8 per cent during the period of the 11th Plan (from 2007 to 2012). The country's GCFI (the Gross Capital Formation in Infrastructure), would need to rise steadily to reach 8 per cent, as a percentage of the GDP by the end of the Plan period.

The study also revealed that Rs 60,000 crore every year would be required to be invested by the private sector in infrastructure projects, assuming that 20 per cent of the investment comes from the private sector.

CII, however, called on the Central and state governments, and other sovereign sponsors to be extra vigilant to so-called 'selection by nomination' masquerading as transparently-awarded PPP contracts.

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