We need more infrastructure spending: PC

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India has to raise investment in infrastructure to 8 per cent of its gross domestic product in the next five years from 4.6 per cent now if the economy is to grow by 9 per cent a year, the finance minister said on Thursday.

India's economy grew 9.4 per cent in 2006/07, its fastest rate in 18 years and second only to China amongst major economies, but poor infrastructure is a threat to sustaining high growth rates.

"Our infrastructure deficiencies have become more visible because of high growth. The most visible indicators of overstretched infrastructure are India's congested highways, airports and ports," Palaniappan Chidambaram told a parliamentary panel that was closed to the public, according to a government statement.

"To sustain 9 per cent GDP growth, investment in infrastructure should be increased from 4.6 per cent to around 8 percent of GDP over the Eleventh Plan period (2007/12)," he said.

A government-appointed panel has estimated India needs USD 475 billion of investment to upgrade its infrastructure.