‘$65-bn investments on hold due to poor policy framework’March 15th, 2009 - 4:57 pm ICT by IANS
New Delhi, March 15 (IANS) Private developers are holding back investments worth $65 billion in India’s infrastructure sector due to hindrances like poor policy framework, limited availability of long-term finance and land acquisition issues, according to an industry lobby report.
The study, jointly carried out by the Federation of Indian Chambers of Commerce and Industry (FICCI) and global consultancy Deloitte, said India should adopt “well-conceived regulatory frameworks” and take measures to reduce political risks to improve the investment climate.
“Well-conceived regulatory frameworks, including independent regulators, sound price- setting regimes, and transparent regulatory processes that invite stakeholder participation, can improve the investment climate by increasing predictability and reducing political risk,” it said.
Other major hindrances the private developers face, according to the report, are long gestation periods, longer payback periods, low tariffs and absence of escalation clause and absence of equitable and quick dispute resolution mechanism.
Delay in land acquisition and lack of coordination between different government agencies are some other issues that have to be tackled, the industry lobby said.
“These issues significantly delay the implementation of all projects and this may require a dedicated implementation cell” with representatives from the states to expedite projects once awarded, it added.
Airport development, air cargo, railways, road transport and maritime infrastructure are the important sectors that need private investment, FICCI said.
Tags: acquisition issues, chambers of commerce, chambers of commerce and industry, dispute resolution mechanism, escalation clause, gestation periods, hindrances, indian chambers of commerce, infrastructure sector, investment climate, land acquisition, maritime infrastructure, payback periods, policy framework, political risk, private developers, regulatory frameworks, regulatory processes, road transport, term finance