The Hindu Business Line : Public-private model mooted for infrastructure growth

Kochi, Sept 19 The Union Cabinet Secretary, Mr K.M. Chandrasekhar, has stressed the need to reorient India’s infrastructure development plans to help attract greater investments in various sectors of the economy.

Inaugurating a conference on Infrastructure Development — Driver for Growth, organised in Kochi jointly by the Kerala Government and the Cochin Port Trust on Friday, he called for public private partnership (PPP) which, according to him, was best suited to the country to overcome the resource crunch faced by the public sector.

He said the committee on infrastructure financing, chaired by Mr Deepak Parekh, had projected an investment requirement of Rs 22 lakh crore during the 11th Plan to achieve the country’s projected growth rate of 9-10 per cent. Pointing out that Indian economy had witnessed commendable performance in the past four years with a GDP growth averaging 9 per cent, he said infrastructure acted as a catalyst for economic development and growth; the major areas of infrastructure development included road, rail, air, water transport, electricity, telecommunications, water supply and irrigation, he added.

To sustain GDP growth at 9 per cent, investment in infrastructure must be increased from the current 4.6 per cent to 8 per cent of the GDP during the 11th Plan period.

This would still fall short of the 10-12 per cent invested by East Asian countries, he said.

Stating that the Centre had introduced a scheme of funding 20 per cent of State PPP projects in the infrastructure sector, apart from accessing an additional 20 per cent of the capital by way of long-term loans from the India Infrastructure Finance Co, Mr Chandrasekhar pointed out that several State governments had already initiated similar programmes, taking advantage of the central assistance.

The Cabinet Secretary also suggested that the Kerala Government should consider nominating a suitable agency to coordinate various PPP projects and also expedite the Kerala Infrastructure Development Bill for rapid economic growth.

He said that with the lowest population growth of 9.4 per cent, against the national average of 21.3 per cent, Kerala stood fourth in the country for infrastructure penetration measured in terms of transport, communication and energy-related variables. But its primary challenge was to upgrade and expand the existing infrastructure to meet the growing requirement of a rapidly changing socioeconomic environment and boost growth.

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