The Hindu Business Line : CII urges greater investment in infrastructure

The CII wants at least seven per cent of the GDP to go into gross capital formation in infrastructure. This means investments of about Rs 200,000 crore a year.

The private sector can bring in about 20-30 per cent and the rest has to come from the Government. Currently, only about half this investment is coming into infrastructure, according to a CII release, issued after a meeting of its national council.

Higher growth in core sectors and investment in infrastructure hold the key to sustaining the growth in economy, according to the CII.

According to the release, the CII's National Council is optimistic about the growth in all sectors, including agriculture, manufacturing, and services.

The council is of the opinion that the core sector comprising power generation and coal, cement, and crude oil production must grow faster than the GDP growth, which is expected to exceed seven per cent in 2005-06.

The Government has to ensure that infrastructure projects in roads, ports, power, coal, and airports have to be implemented to ensure growth.

"A regulatory framework is needed to attract such investments. A task force would also be needed to monitor the projects and to ensure that targets are achieved."

In power the focus should be on nuclear and non-conventional energy; and coal mining should be liberalised to attract investments.

The CII's optimism on growth in the current year is based on the reducing trend in fiscal deficit, resilience to high oil prices, increase in VAT collections, and more than 20 per cent growth in non-food credit, the release said.

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