Private sector to chip in $500 b for infrastructure

NEW DELHI, December 23, 2010 :nion Finance Minister Pranab Mukherjee on Wednesday said he saw the private sector chipping in with $500 billion (about Rs.22.50 lakh crore) for development of the infrastructure sector during the XII Plan (2012-17).

"We are already envisaging doubling of infrastructure investment to around $1 trillion in the XII Plan, with half of it coming from the private sector," he said, while delivering a key note address at the India Public Private Partnership conclave.

Important pillar

The Minister further said that with growing requirement of funds for the infrastructure sector, "the PPPs (have become)...an important pillar of our strategy for infrastructure development."

During the XI Plan (2007-12), the Minister said, the government tried to scale up investment in the infrastructure sector to 7.1 per cent of the Gross Domestic Product (GDP) with the private sector contributing about one-third of the total envisaged investment of about $500 billion.

The contribution of the private sector in development of infrastructure was only one-fifth during the X Plan.

Pointing out that some States had not done well, Mr. Mukherjee said there was a need to accelerate the "PPP momentum''.

The States, the Minister said, were in the process of finalising around 350 PPP projects envisaging an investment of Rs.1.50 lakh crore.

The Minster further said the government had decided to include a 'disclosure statement' in the annual budget for all annuity PPP projects.

He also sought suggestions from various stakeholders for accelerating inclusive growth, avoiding risk of over-commitment and extending the model for development of social sector projects.

The government, he added, would extend knowledge support for the PPP projects through three initiatives which were preparing training modules for capacity building; make available online tool kits; and address communication related challenges.

These programmes, he hoped, would help States develop more robust and efficient PPP projects.

Photo:TONING UP PPP MODEL: Union Finance Minister Pranab Mukherjee (left) and Planning Commission Deputy Chairman Montek Singh Ahluwalia at the India PPP conclave in New Delhi on Wednesday. Photo: V. V. Krishnan