The government may face a shortfall of $300 billion in funding requirements for the infrastructure sector in the 12th five year plan,and financial institutions will have to make extra efforts to bridge the gap,Finance Minister Pranab Mukherjee said here.
Availability of long-term resources to meet investment requirement in infrastructure is a key challenge. As per estimate,there may be a gap of 30 per cent in debt financing in 12th plan which is about $300 billion, Mukherjee said here while launching the credit enhancement scheme of India Infrastructure Finance Company (IIFCL).
As such,the government plans to invest $1 trillion during the 12th plan period beginning April 2012 in the infrastructure sector. This is much above the estimated $500 billion in the 11th Plan.
There is a need to develop new instruments for improving financing of infrastructure projects in the country. IIFCL,through this product,would provide opportunity for long-term fund from insurance and pension fund. These mechanism would help in development of infrastructure bond market, he said.
As part of the credit rating enhancement scheme,IIFCL would provide opportunity to infrastructure projects to obtain long term fund from insurance and pension companies.