The Hindu Business Line : `Infrastructure financing needs $40 b in 5 years'

Mr Rajiv B. Lall (right), Managing Director & CEO, IDFC Ltd, with Mr Anil K. Agarwal, President, Assocham, at a conference on `Way forward on infrastructure committee' in the Capital on Friday. - Ramesh Sharma

New Delhi , Oct 13

The Infrastructure Committee of the Assocham has projected infrastructure financing requirement of foreign equity capital of over $40 billion in the next five years.

The chamber has suggested that the role of long-term financial institutions such as insurance companies, provident and pension funds and NBFCs be enhanced for financing infrastructure projects.

It has submitted its recommendations to the Planning Commission Deputy Chairman, which mentions that domestic savings need to be supplemented by limited access to foreign savings with priority for foreign equity capital.

This is because the country would need foreign equity of $5-7 billion a year in infrastructure.

Addressing a conference on Friday, Mr Rajiv Lall, Chairman of the committee, said: "In policy and regulation, the committee focused its attention primarily on road, urban and power sectors."

In the road sector, the committee noted that State highways - which constitute four per cent of the network but carry 40 per cent of traffic - are grossly under-funded and recommended that the facilitating framework created by Madhya Pradesh be replicated in other States.

The key components of the Madhya Pradesh model include a special legislation for State highways, a master plan (including a comprehensive database, a schedule for implementation based on prioritisation and identification of corridors for private public partnerships) and creation of a State highway authority.

The Central Government needs to play a more active role in steering development of State highways and formulating a common framework, the chamber said.