Montek for pvt investment to achieve growth target

Stating that the public-private partnership (PPP) model was not a ready mantra to suit all situations, Planning Commission deputy chairman Montek Singh Ahluwalia said that the government should partly subsidise the capital costs to attract investments in sectors like roads.

Speaking at the Administrative Staff College of India (ASCI)'s foundation day lecture on "Infrastructure development: Problems and Prospects" here on Tuesday, Ahluwalia said that attracting private investments was an urgent need to achieve the scale of infrastructure development required to reach the targeted growth rate.

"The deficit in infrastructure is huge and requires additional investments to the tune of 3 percent of GDP to jack up the overall spending in the sector to at least 7 per cent of GDP," he said, adding that China managed to achieve higher and speedier growth only because they spent more on infrastructure.

According to him, a steady decline in investments in infrastructure had happened in the past decade as a result of which the spending on infrastructure had shrunk to 3.6 per cent of GDP in 2002-03 from 5 per cent to 16 per cent of GDP between 1980 and 1990.

"The success of privatisation of the telecom sector is universal where people are ready to pay for the services. Sectors like roads where people are not willing to pay toll remain a difficult proposition to attract investments. So the Centre has devised a competitive bidding method, where whoever quotes the lowest subsidy from the government will get the project," he said.

Describing roads, railways, ports, airports, power and telecommunications as the core infrastructure that affect the productivity across the board, Ahluwalia also termed irrigation, water, rural roads, health and sanitation as the necessary rural infrastructure requirements that can be executed only by the public sector with a scope for community participation.

Stressing the need to step up investments in education and health, he said,"without a healthier and educated population, India cannot reap the benefits from the enormous opportunities that are coming in our way."