PPPs to boost infrastructure industry: Economic Survey

March 15th, 2012 - 3:41 pm ICT by IANS  

Pranab Mukherjee New Delhi, March 15 (IANS) Public private partnerships (PPPs) are likely to boost the infrastructure industry with almost 50 percent of the Planning Commission’s projected investment requirement during the 12th Plan expected to come from the private sector, says the Economic Survey.

“PPPs are expected to augment resource availability as well as improve the efficiency of infrastructure service delivery,” said the survey tabled by Finance Minister Pranab Mukherjee in parliament Thursday

The Planning Commission has projected an investment requirement of over Rs.45 lakh crore ($1 trillion) during the 12th Plan (2012-12).

“It is projected that at least 50 percent of this investment will come from the private sector as against the 36 percent anticipated in the eleventh plan,” it added.

According to the Planning Commission, public sector investment will also need to increase to over Rs.22.5 lakh crore against an expenditure of Rs.13.1 lakh crore during the 11th Plan.

The survey said there was improvement in growth in areas such as power, petroleum refinery, cement and railway freight. Coal, natural gas, fertilisers, handling of export cargo at airports and number of cell phone connections showed negative growth.

The survey also said that the credit growth to the infrastructure sector turned negative in the current financial year.

“The incremental credit flow to the infrastructure sector during April-December 2011 was nearly 61 percent of the credit to this sector during April-December 2010. A significant reduction in credit flow was observed for the power and telecom sectors.”

On large-scale investments into infrastructure, the survey says that there is need to introduce more innovative schemes to attract long term investors.

“All efforts need to be made to attract big ticket long-term investors such as strategic investor, private equity funds, pension funds, and sovereign funds. Strengthening domestic financial institutions and development of a long-term bonds market may be critical.”

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