Infrastructure sector needs $1 trillion

Chennai, May 25 | Updated: May 26 2007, 05:30am hrs
India needs more than a trillion dollars of investment in infrastructure, especially in power sector, parliamentarian and former union power minister Suresh Prabhu said on Friday.

The 11th Plan estimate of $320 billion investment in infrastructure was a conservative figure, he said, adding a special purpose vehicle for the power sector needed to be created and the sector needed a regulatory framework.

He was addressing the seminar on Innovations to overcome infrastructure bottlenecks, by the All India Management Association and the Madras Management Association here.

He said the reason the power sector had not attracted investment as much as the telecom sector as it was not commercially viable.

Both public and private sector should come forward and create the infrastructure, he further added.

Prabhu said the reasons why the telecom sector was successful as it was under the central government control, all the front-ended benefits reached the consumer like fall in tariffs, technology was properly utilised.

He said the most important thing in the country while creating infrastructure was to adapt to climate change. This should be the principle driver of infrastructure investment. Infrastructure is not a stand alone issue. Poverty alleviation, job creation and economic growth go hand-in-hand with it, Prabhu said.

Earlier, Anil Khandelwal, chairman, Bank of Baroda said infrastructure handling should be a priority.

Infrastructure is the biggest embarrassment to India. It should complement the growth rate. There were financial constraints for financing infrastructure and it should move from the traditional sources to conventional sources like insurance and pensions funds, he said.