Infrastructure is the key to achieving a sustained growth. It is a paradox that India, which is woefully short of infrastructure, could still be able to clock a decent growth rate, thanks to contributions largely from the manufacturing sector. How much more we would have grown had we stayed focused on infrastructure development is anybody's guess. It is pertinent to note that China and India have many things in common but three things that make China different from and ahead of India is its effective utilisation of human capital, a thoroughly motivated work force with a single-minded focus on absolute development and its sizeable build-up of infrastructure on a consistent basis.
Apart from a serious dearth of funds, the second biggest problem that banks and financial institutions face in this business of infrastructure financing is a big asset-liability mismatch since infrastructure loans are for a longer period of time as compared to deposits.
Bridging the huge gaps in infrastructure and also the enormous funds required for meeting these gaps (which is estimated to be of the order of $520 billion till 2012) promises to be a great challenge and will be critical for India’s required infrastructure push.
Srinivasan Umashankar, Nagpur
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