The Planning Commission on Thursday admitted that total investment in infrastructure during the 11th Plan period (2007-08 to 2011-12) is likely to be 10-12 per cent less than the target of $500 billion.
Though the shortfall may not be as much, it assumes importance since the aim is to get $1 trillion of funding for infrastructure in the next five-year plan. However, it should also be noted that the shortfall comes during the period, which faced global financial crisis, and is again witnessing global economic slowdown.
On Infrastructure Debt Fund (IDF), Ahluwalia said, “Issuing guideline (for setting up of IDF) is virtually complete. There are some details, which we will sort out very quickly.”
The guideline is not meant to clear $10 billion fund, he said. “Our initial objective is to have a set of guidelines in place where two-three such funds take off. I expect at least two such funds to start off during the current fiscal,” he added at the India Infrastructure Summit organised by industry body Federation of Indian Chambers of Commerce and Industry.
Ahluwalia said the government has set up a high-level committee under the chairmanship of former Reserve Bank of India deputy governor Rakesh Mohan on financing of the infrastructure sector. The committee is expected to submit its report soon.
He also called upon the private sector to honour its assurance of performance in undertaking infrastructure projects and suggested that the terms of service delivery be clearly defined so that it is amenable to government scrutiny, just as in the case of public sector projects.
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It should be logical to open the private sector projects to government scrutiny in terms of assessing the performance parameters so that infrastructure projects do not suffer from time and cost overruns and ensure that public interest is not compromised in any way, he said.
During the 12th Plan period (2012-17), he said, almost 50 per cent of the spending on infrastructure would have to come from the private sector. “While the public sector investment will increase in absolute terms during the five year period, this would essentially be channelised into areas such as rural roads and railways to improve transport connectivity to the remotest parts of the country,” he said.
He further said the Planning Commission was undertaking detailed exercises to sort out issues related to land acquisition, environmental and forest clearances and inter-sectoral linkages. These would be part of the operational details currently being worked upon and would be built into the final plan document that would be ready by this fiscal-end, he added.
Analysts believe that infrastructure bottlenecks come in the way of India sustaining high economic growth. As approach paper to the 12th Five-Year Plan targets nine per cent growth a year on an average, funding for infrastructure would be a key issue.