The country’s experience with PPP (public private partnership), mostly in the infrastructure sector, has not been good. And one of the reasons was asking PPPs to take risks that were difficult for them to handle.

This apart, the “excessive dependence” on bank finance in the infra sector too has not worked out well, Jayant Sinha, Union Minister of State for Finance said.

While attending the 25 year celebrations of Srei Infrastructure Finance Ltd in the city on Saturday, Sinha said companies must look at self financing themselves in some cases.

Stalled infra projects

Earlier in the day, Sinha had pointed out there were several stalled infrastructure projects across the country; and these were creating a stress in the economy as well as the banking system.

The main challenge, he said, was to ensure movement of these projects that have been stalled due to lack of fuel linkages, non-availability of land and lack of funds.

According to the Minister, the country needs at least $ one trillion to be pumped into the infrastructure sector over the next few years.

Interest rate reduction

At an earlier programme in the city, Sinha made a case for further reduction in interest rates to boost consumer demand.

“Interest rates needs to come down as lower interest rates would help consumer demand to pick up. Also, a lower interest rate means lower cost of borrowing for industrial and commercial projects which is important for the growth of the economy,” Sinha said.

The country’s consumer price index (CPI) inflation eased to 5.17 per cent in March and the Reserve Bank of India has reduced key policy rates twice since January. However, it kept the rates unchanged in its monetary policy earlier this month.

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