Economic Affairs Secretary Subhash Garg on Tuesday said that the government is planning to dedicate a large part of budget towards capital expenditure on infrastructure and will push for foreign investments in the sector. Subhash Garg was quoted saying by TV reports that the infrastructural development in India was largely public sector, but the government is exploring PPP and private mode investment for future and is seeking investments from overseas sovereign funds.
He further said that the government needs to develop the corporate bond market and to seek the financing directly from the people and the bond market. More focus on private investment in infrastructural development was earlier pointed by rating agency CRISIL in October.
In India, the infrastructure requirement is going to be big in the next five years, according to a report by CRISIL. India needs to spend at least Rs 50 lakh crore in next five years through the year 2022 to develop infrastructure, the country will see close to Rs 3,000 crore investment per day.
RISIL said that to ensure involvement of more private investments, comprehensive retooling of public-private partnership frameworks, and deepening of the infrastructure financing ecosystem are required. “For years now, the government has been doing the heavy lifting in terms of infrastructure investments. However, having only the public investment cylinder firing is not good enough,” CRISIL said. “Accelerating private sector investments is an essential complementarity, and the other cylinder that needs to fire,” it added.
To do that, CRISIL said that the country needs to solve, among other things, the problem of stressed assets in the banking system to push the investment cycle. “Spending of such magnitude requires expeditious resolution of the problem of stressed assets in banking, front-ending of bankable projects, comprehensive retooling of public-private partnership frameworks, and deepening of the infrastructure financing ecosystem, which is of tremendous importance,” CRISIL MD & CEO Ashu Suyash said in the statement.