The government's $500 billion infrastructure spending plan by 2012 is a tough one to achieve as fund availability is proving a problem, the Economic Survey said today.
"The Eleventh Five-Year Plan has estimated an investment requirement of $500 billion in infrastructure for broad- based and inclusive growth. The foregoing analysis indicates that achieving this is a challenging task," it said.
Public initiatives of mobilising private investment is constrained by factors like inadequate shelf of bankable projects and shortage of long-term finance for projects.
It, however, expressed the hope that given the resilience that the Indian economy and its financial system has demonstrated amid adversities, the issues will be addressed and suggested government for a regulatory authority for the transport sector covering highways, railways, ports and airports.
"The planning Commission could act as the nodal body for carrying out the selection procedure for the chairman and for staffing the economic unit," it said.
The corresponding department or ministry could be the authority for appointing the sub-sector member and the specialised sub-units. The chairman of the body would also be assisted by a neutral economic unit.
If needed the authority could also have specialised groups of professionals in each sector, the Survey added.
It also identified six constraints in promoting PPP projects including policy and regulatory gaps, inadequate availability of long-term finance and inadequate capacity in the private sector - both in the form of developer and technical manpower.
The 11th Plan envisages infrastructure investment of 20,56,150 crore, to be shared between the Centre, states and private sector in the ratio of 37.2, 32.6 and 30.1 per cent.
The total required debt financing has been estimated at Rs 9,88,035 crore while out of Rs 6,19,591 crore projected infrastructure investment by the private sector in the 11th Plan period, Rs 1,85,877 crore is expected from internal equity financing.
The Survey underlined the need for addressing bottlenecks in infrastructure projects like delay in land acquisition, law and order problems in states and shortage of raw materials systematically.
"...Timely implementation of projects is critical for ensuring their financial viability, as also for reaping the projected economic benefits," it stressed.
Attributing the economic miracle of high-growth Asian economies to substantial investment in infrastructure, the Survey said, "The current economic slowdown provides an opportunity for countries like India that have substantial degree of unmet infrastructure requirements... Spending on infrastructure has large multiplier effects."
