In a significant development, the US Exim Bank would set up a corpus of $5 billion to meet India’s ever increasing financial requirement in the field of infrastructure. The announcement in this regard is expected during the visit of US President Barack Obama.
Representatives of the US administration and senior officials of the Indian business chambers, who did not want to be quoted, told Business Standard “US Exim Bank has taken a decision to set up a special corpus of $5 billion to invest in India’s infrastructure. This would benefit both the US and Indian companies to pursue their investment plans in infrastructure. The US Exim Bank’s move is crucial especially when India would need an investment of $1,025 billion during 12 th plan compared to $514 billion in 11 th plan for infrastructure development.”
The Planning Commission has recently said that the the fund requirement would be met from multiple instruments including debt financing. The Federation of Indian Chamber of Commerce and Industry said that eventhough India's rapidly growing economy has been placing huge demands on power supply, roads, railways, ports and transportation system, infrastructure bottlenecks have been eroding the country's competitiveness. Increases in power generation during 10th plan fell short of target when the economy was growing at 8% annually.
US Exim Bank is bullish over the India’s various initiatives to boost infrastructure. The power sector is expected to add nearly 62,000 MW by end of 11 th plan and 1 lakh MW each in 12 th and 13 th five year plans. Similarly, NHAI has involved in the development of roads and highways while the government has launched development of ports and related sector with an investment of Rs 50,000 crore.
It must be mentioned here that the US Exim Bank and Nacil, the holding company of national carrier Air India, had signed an agreement worth $ 1.1 billion to support financing of sale of Boeing airplanes to the Indian carrier. The financing would support the sale of Boeing B777-200LRs and B777-300ERs to be operated by Air India and B737-800s to be operated by Air India Charters.