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Our Bureau

Mr P. Chidambaram

New Delhi , Nov. 8

THE Finance Minister, Mr P. Chidambaram, on Tuesday said that infrastructure development in various parts of the country was being hampered as some State Governments were not taking the required steps.Addressing a meeting of the Parliamentary consultative committee attached to his Ministry here, Mr Chidambaram said the reluctance of States to share the responsibility of development of infrastructure was reducing the room for the Centre to invest in basic infrastructure.

Mr Chidambaram said the Government would encourage public-private partnership projects to cater to the huge funding requirement of the infrastructure sector. He said the Government's budgetary resources alone would not be enough to meet the funding requirement.The Finance Minister said various measures have been taken to bring about a conducive environment for large-scale investment flows, both domestic and foreign. The Government is providing fiscal incentives in terms of "tax holiday" to infrastructure projects, tax incentives to investors providing long-term finance or investing in equity capital of the enterprises engaged in infrastructure facility, he added.

The Finance Minister agreed that different approaches are required for different sectors.

He pointed out that the two major initiatives to increase public-private partnerships in infrastructure are providing for viability gap funding and setting up a special purpose vehicle to meet long-term financing requirement of potential investors.

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