The Hindu Business Line : Worldclass infrastructure in 10 years: Chidambaram

New Delhi, June 28 The Finance Minister, Mr P. Chidambaram, has expressed confidence that India would within the next ten years succeed in putting in place infrastructure that would be equal to the best in the world.

Addressing the faculty and students of the London Business School at London on Thursday, Mr Chidambaram admitted that the challenge of infrastructure was “huge” and the requirement of funds was “humungous”.

The Finance Minister noted that the robust growth in GDP has exposed the grave inadequacies in the country’s infrastructure sectors.

“It is now widely acknowledged that the state of the infrastructure is a drag on the economy, perhaps by as much as 1-2 per cent a year”, he said.

He highlighted that the Committee on Infrastructure Financing, which submitted its report in May 2007, has advised that the target for infrastructure investment should be revised from $ 320 billion to $384 billion at 2005-06 prices, which is equivalent to $ 475 billion at current prices.

Fund needs

It had been earlier estimated that during the Eleventh Plan period (2007 to 2012), the country would need to invest over $320 billion in infrastructure alone.

“I can say with confidence that no country than India needs and no country than India can absorb so much funds for the infrastructure sector”, Mr Chidambaram said.

Stating that the real challenge lies beyond the resources, Mr Chidambaram underscored the need to look for innovative mechanisms and instruments to channelise the funds into the infrastructure projects.

Outlining some of the innovative measures of the Government like viability-gap funding and establishment of India Infrastructure Finance Company Ltd (IIFCL), he said that the Government has also persuaded the Reserve Bank of India to lend $5 billion from the foreign exchange reserves to the IIFCL to enable the company to on-lend to infrastructure projects for their capital expenditure.