The private sector may have to chip to ensure the success of the government's ambitious flagship programme Rajiv Awas Yojna to make the country slum-free.
"There would be a requirement of about Rs 4 lakh crore to implement Rajiv Awas Yojna and the money cannot be sourced from the government alone," said Union Minister of State for Urban Development Saugata Ray while addressing an Assocham seminar on 'private equity in infrastructure'.
Private players will have a big role to play in the project and the modalities are being worked out by the Planning Commission, Ray said.
The scheme, which aims to make the country slum free in five years, got a special mention in the Presidential address as a flagship programme of the Centre.
Referring to another flagship programme of the government, the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), he said "we are seeking a loan of $5 billion from the World Bank and negotiations are on".
According to the Assocham, in order to achieve a consistent GDP growth rate of 9 per cent per annum, India needs an investment of around $502.88 billion in infrastructure during the eleventh Five Year Plan of which 30 per cent ($154.90 billion) is expected to come from the private sector.
"So it is clear that the private investment in the infrastructure is not a matter of choice but of necessity," he added.
Ray said that India has become an important destination for investment into power, telecom, exploration of oils and gas, ports, airports, highways, railways and civic infrastructure.
"Each infrastructure sector presents a unique set of opportunity and challenges. Private equity firms, both domestic and foreign, appear equally interested to grab the opportunities and undaunted by these challenges," he said.
Under the JNNURM, the Urban Development Ministry has sanctioned 467 projects worth Rs 50,339.92 crore.
Describing the private participation as a win-win situation for the promoting company, investor and the end users, the minister said "private equity brings in not just capital but ideas, efficacies and new business opportunities.
It sets the ball of growth rolling, which creates huge direct and indirect employment opportunities."
However, he said, the government as well as other stakeholders have experienced that relying completely on private production, particularly without appropriate regulation, is also not likely to produce optimal outcome.
