1. India needs Rs 26 lakh crore for infrastructure financing in 5 years: Study

India needs Rs 26 lakh crore for infrastructure financing in 5 years: Study

In urban infrastructure, municipal bodies are likely to need significant investments for constructing urban roads...

By: | New Delhi | Updated: January 8, 2015 9:59 PM
infrastructure, infrastructure financing, infrastructure projects, infrastructure projects in India, Make in India, Make in India campaign, Make in India infrastructure projects, Indian economy

The analysis showed that out of the estimated Rs 26 lakh crore amount required for infrastructure projects. Reuters

Government will have to undertake a massive provisioning of Rs 26 lakh crore for the next five years beginning 2015 to finance infrastructure projects to provide a fillip to ‘Make in India’ campaign and help the economy attain 7-8 per cent growth, says a study.

The study by industry body PHDCCI an Crisil Ratings also highlighted that investment norms for pension funds and insurance companies will have to be liberalised further to utilise their corpus to part finance infrastructure projects.

The analysis showed that out of the estimated Rs 26 lakh crore amount required for infrastructure projects, almost 80 per cent will be needed for power, roads and urban infrastructure.

In power, generation will continue to account for the largest share of investments whereas in roads, investments be driven towards building national highways and state roads.

In urban infrastructure, municipal bodies are likely to need significant investments for constructing urban roads, expanding its transport and revamping water supply and sewerage infrastructure, the study showed.

Moreover, 70 per cent of the projected Rs 26 lakh crore investment for infrastructure financing will have to be funded through debt, with banks remaining the largest source of finance, while external commercial borrowings (ECBs) may provide funds to the extent of 14 per cent.

The remaining amount is expected to come through bonds issuance provided the bond market is further deepened with critical measures by RBI and SEBI.

The study points out that it would be difficult for banks alone to finance infrastructure projects as infrastructure project loans have long tenures of 10 to 15 years while bank deposits, the main source of funds, typically have a maturity of less than three years.

  1. V
    vbs
    Jan 8, 2015 at 9:25 pm
    IF tax payer money is used effectively itself there shouldnt be need for more in india...Stop offering subsidies and freebies to the indiscriminately poting of the country by the existing poor with no resources in first place to have children, and so as to to support them infact...... Also whatever infrastructure being laid out need to be done with quality in place and same being maintained well for several years rather than the peel off and damaging ones that get built day after day in india and replacing of same seems what is happening overall...every time which is where the money goes wasted more and more...
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