The Hindu Business Line : Infrastructure sector sees Govt capacity to invest weakening

Hyderabad, Aug 1 The infrastructure industry foresees a strain on the Government’s capacity to invest in projects, keeping in mind the growing pressure on its resources.

“Spiralling oil bill, the outgoes on account of the Sixth Pay Commission and the huge loan waiver for the farming community could have an impact on the Government resources,” Mr J.P. Nayak, Chairman of CII’s Suminfra 2008, and President (Machinery and Industrial Products) of Larsen & Toubro Ltd, said.

Talking to reporters on the sidelines of the two-day infrastructure summit organised by the Confederation of Indian Industry here on Friday, he said it was estimated that there could be investments to the tune of $500 billion by 2012 on various infrastructure projects in the country. “Of this, the contribution from the private sector could be around 20 per cent, with the Government contributing the remaining amount in public-private partnership projects,” he said.

He, however, said the Government needed to give additional contribution in the form of a viability gap funding in cases where the projects were not that viable.

Asked about challenges the infrastructure industry faced, he said the present increase in inflation rates could be because of the international issues. “But in the future, domestic reasons could trigger it further,” he said.

Bottlenecks

He said getting permissions was one of the biggest challenges the infrastructure companies faced. “There are as many as 60 permissions you need to get. Some are sequential. They are not bothered,” he said.

Citing the example of the Andhra Pradesh Government and in the case of ultra mega power projects, he said single-window clearances and getting all approvals ready well ahead of the implementation phase would help the industry take up the projects on fast track.

People’s right

He, however, said that people who gave land for projects should be adequately compensated. Citing the example of a group of farmers near Pune, he said they formed an association and developed the site. In the process, they could earn more than what they would have got.

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