The debt requirements alone of private and public projects would be to the tune of $150 billion, which cannot be mobilized from the bond market alone. A review of the bond market is high on the governments agenda, Ahluwalia said. Earlier, union finance minister P Chidambaram had said that India needs an investment of $488 billion for infrastructure over the next five years, 70% of which will come from the government, including budgetary expenditure. The remaining would be funded privately. Expenditure on infrastructure needs to be in the region of 9% of the GDP over a period of five years to meet the surging demand in the country.
Putting into perspective the views of Mukesh Ambani, chairman, Reliance Industries, who earlier said that policy makers and corporate honchos should not lose sight of the requirements of rural India, Ahluwalia said that 20% of the total investment in the next five years would be channelised to the rural sector. Stating that the government would not like to see public money being put into private projects, Ahluwalia said that the biggest challenge is to get as much investment as is needed. The central government is addressing some of the key issues including bringing about clarity through a competitive bidding process, creating an environment of proper financial infrastructure and maintaining proper dispute regulation and sanctity of contracts. Dabhol would not have happened had we gone for competitive bidding, he added.
Earlier, Mukesh Ambani said that the private sector has always invested in Indias infrastructure. Between 1994 and 2005, the private sector invested $51 billion in Indias infrastructure, he said. Allan B. Hubbard, director, National Economic Council, said that many US investors channelise their investments through Mauritius owing to a bilateral treaty that country has with India, but this need to change so that US companies can directly invest here.