FM expects dedicated infra and debt funds soon
New Delhi, Feb 5: Finance Minister P Chidambaram today underscored the need for tapping foreign savings to meet the phenomenal funding needs of building India's infrastructure and said he expected dedicated infrastructure and debt funds to be launched within a month.
Addressing a large audience here interested in the building of infrastructure, Mr Chidambaram said the government was well versed with the problems and bottlenecks coming in the way of rapid development of infrastructure and gave an assurance that the government would attend to these.
The minister was inaugurating an International Conference on 'Meeting India's Infrastructure needs with Publc Private Partnerships- The International Experience and Perspective', whose key sponsors were the World Bank and International Finance Corporation.
Mr Chidambaram said there were weaknesses relating to policy and regulatory framework of infrastructure and said as many of the infrastructure projects have to be located in states, they ought to address these forthwith.
Besides, he said, there was a dire need for developing innovative instruments to raise debt and equity.
The finance minister said there was a shortage of credible and bankable projects in infrastructure.
Mr Chidambaram admitted that there was lack of capacity in public institutions and public offices to handle and develop Public Private Partnership projects.
Stressing the need for stepping up savings and investment rate, Mr Chidambaram said household savings which stood at 22 per cent could be notched up substantially. For meeting the Investment requirements of building infrastructure, being in the region of 320 billion dollars, both domestic and foreign resources need to be tapped.
He outlined the measures already taken by the government for funding infrastructure, such as the the India Infrastructure Finance Company launched recently and the Viability Gap Funding mechanism, and expressed hope that the investing community would take recourse to these.
The finance minister welcomed the statement of Railway Minister Lalu Prasad at the inaugural that there would be no reckless privatisation and non-core activities would remain with the government.
Mr Chidambaram said a nine per cent growth of the economy cannot be sustained without a sound infrastructure base. This was now a key constraint in growth and development.
He highlighted that 100 per cent FDI was now permitted in most infrastructure projects.
Mr Chidambaram dwelt at length on the need for capacity building in infrastructure and lauded the role of the World Bank and ADB in this regard.
The finance minister also spoke about the "enormous aspirations" and "very attractive opportunities" in emerging India.
UNI