Challenges of Financing Infrastructure in India

XThe recent economic survey has on the one hand stressed the need for primacy for public financing of infrastructure development, while noting the slow-down in investments to downsize by 40% the USD 1 trillion target infrastructure investments for the XII Plan (of which 48% was to be private capital). The magnitude of capital required and the shortfall in India is best understood in terms of facts:

(a)11th Plan’s (2007 to 2012) investment target for infrastructure was US$ 500 bn. (Rs.20,56,150 crores) with 30% private investment. Actual private investment rose to 36.87% of the actual investment of Rs.19,00,063 crores.

(b)12th Plan (2013 to 2017) envisaged an investment target in infrastructure of US$ 1 trillion (Rs. 55,74,000 crores) with 46.68% private investment.

(c)With only 65% of the annual target being met during the first two years, the Plan investment target has been reduced by 40% to Rs.30,93,558 crores with 39.19% private investment.

Please click here to read the full article.