IMC president YP Trivedi in a memorandum to Prime Minister AB Vajpayee and Finance Minister Yashwant Sinha has called for evolving a rational infrastructure policy.

Trivedi said that the Centre should frame firm policy parameters regarding infrastructural projects for private sector and ensure smooth implementation. During the last three years, about two-thirds of the Rs 33,900 crore worth of sanctions for infrastructure projects were not disbursed.

Trivedi said that a major structural weakness is the near total neglect of infrastructure in economic policy making, which has been continuing even in the post-reforms era. The economy will generate a massive demand for infrastructure services like power, roads, ports, railways andtelecommunications to realise a growth rate of 7-8 per cent, he said.

The IMC chief said that the contours of infrastructure policy must be clear for smooth flow of resources in the infrastructure sector. He added that the government's dithering on telecom sector concerning licence fees or determining power tariff and resultant desperation of the private sector stresses the need for clear policy on infrastructure. "The emergence of a real challenge in infrastructure financing squarely hinges on proactive, positive action from the government," he added.

The implementation of the new legal and regulatory frameworks which will ensure that the resources raised abroad are properly utilised for the productive infrastructure projects is the real challenge, he said. The financing of infrastructure is linked to the development of the long-term debt market which, in turn, is dependent on sustained flow of savings. IMC has suggested that savings need to be stepped up from 26 per cent of GDP to 30 per cent plus infuture.