India may fall short of its $500 billion target for infrastructure investment by as much as 10-12 per cent in the current five year plan,the Planning Commission said today. Even though the shortfall is not much,say infrastructure players,it indicates that raising finances worth $1 trillion for the infrastructure sector in the 12th Plan period may prove to be a daunting task. In fact,the Plan Panel estimates,that there could be a possible funding gap of $100 billion during the next plan period.
We think our investment will probably be little short of the $500 billion target (in the 11th Plan). I would not be surprised if it is 10 per cent or even 12 per cent short, Deputy Chairman,Planning Commission,Montek Singh Ahluwalia said at the Ficci Infrastructure conference.
The major shortfall to infrastructure investment in the current plan has come from the railways,power and ports sector,according to officials. The government has proposed bringing in pension and insurance funds to bridge this gap by creating infrastructure debt funds,for which final guidelines are likely to be out soon. We need several $10 billion funds. I expect at least two to start off (in this fiscal year), he said.
The commission plans to raise the share of private funding in the infrastructure space in the 12th Plan period to about 60 per cent of the total share compared to 35-40 per cent estimated to be received from the private sector in the current five year plan.
Talking about the next plan,B K Chaturvedi. Member infrastructure,Planning Commission said,Sectoral policies are in place and risk allocation issues have been settled by the model concession agreements. The focus will now be on effective implementation.
As far as railways are concerned,the plan is to invest as much as Rs 80,000 crore in the eastern and western freight corridors in the next plan,along with introduction of high capacity (30 tonne) freight trains and high-speed passenger trains,Chaturvedi said.
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