Infra holds great investment potential: Montek

With infrastructure poised for a major expansion and investment friendly regulations in place, Montek Singh Ahluwalia told investors that this sector provided attractive opportunities for them.

Addressing the fourth India Investment Forum here, Montek Singh Ahluwalia highlighted the steps the Indian government was taking to attract investments in the infrastructure sector, saying it is open to suggestions which they might have to offer to make the investment process smoother.

"The Indian economy is doing well but the dynamism has put the infrastructure under great strain and if the country has to maintain a high level of growth rate, it is imperative that it develops the infrastructure at a fast pace," he said.

The spending on infrastructure sector last year - the base year for 11th five-year plan - was 5% of the GDP which would be increased to 9% over the next 5 years, he said.

This, he said, means India would need $492 billion over 5 years for this sector. If it was business as usual, the total investments would be around $300 billion. Thus the country would need to find extra $192 billion.

Pointing out that substantial part of investments would still be made by the public sector, he said that private sector investments too are poised for a major expansion.

He said the private sector contribution in the 5% of GDP spent on infrastructure sector last year was only 0.9%.

"We hope the private sector investments would grow to 2.2% as spending goes up to 9% of the GDP. The public sector investments are estimated to go up from 4.1% to 6.8%.