There is no dearth of capital to finance India's massive infrastructure development provided the projects involving huge investments are handled with "transparency" and "good governance", SBI Chairperson Arundhati Bhattacharya said today.
There is no dearth of capital to finance India’s massive infrastructure development provided the projects involving huge investments are handled with “transparency” and “good governance”, SBI Chairperson Arundhati Bhattacharya said today.
“Capital is not a problem. There is enough capital and there is enough capital chasing yields.
To that extent there is no dearth of money,” Bhattacharya, who took part in an international seminar organised by the China-led Asia Infrastructure Investment Bank (AIIB) here, told PTI.
Bhattacharya said the important issues were “proper projects, good governance and transparency”.
“When I say transparency, I mean the way the project is given out, the way it is handled, the way society is taken on board, so all of these things are required. If these things are done properly I do not think we will be lacking in money,” the 60-year-old banker said.
“Most important thing is risk allocation. If the risk allocation is done in the right manner then the project becomes bankable,” she said in reference to India’s infrastructural development programme.
While Finance Minister Arun Jaitley along with an international panel including Chinese Finance Minister Lou Jiwei took part in the discussion on Infrastructure and Global Economic Growth, Bhattacharya took part in the dialogue on Financing Green Infrastructure along with President of the New Development Bank (NDB) of the BRICS countries K V Kamath.
“For instance the panel talked about land acquisition. That is not a risk a sovereign can pass on to a promotor. At the end of the day land acquisition has to be ensured by the local government,” Bhattacharya said.
About the flow of private investments in India, Bhattacharya said the only reason private sector is very apprehensive about dealing with projects is the uncertainty.
“Private sector has no issue in coming into infrastructure sector. They know very well that infrastructure is one area that can give you very steady long term returns,” she said.
“There is no dearth of capital. Infrastructure is one area (in which) yield can be reasonable. It can be over a long period of time,” Bhattacharya said.
“If you are looking at pension funds or the insurance funds (they) need long term investments. In order to ensure long term investment it is important to make infrastructure as transparent and as bankable as possible, should be a win win for all,” she added.
Earlier, at the seminar, Finance Minister Arun Jaitley had said India requires USD 1.5 trillion investment in infrastructure in the next ten years.
Earlier, Lou in his remarks on structural reforms, said “it is very difficult to obtain land in India. Prime Minister Narendra Modi pushed forward for reform in this area and achieved some progress. This is also structural reform.”
Both the government and opposition in India should address such issues for better implementation of infrastructure projects, he said.
In his address on growth, Lou said the world economic growth is modest and uneven and facing downward pressure.
“There is still a long way to go before we can achieve strong sustainable and balanced growth,” he said.
“The Brexit has further heightened the uncertainty of the capital markets,” he said, adding that the Multilateral Development Banks (MDBs) like AIIB and NDB should play their role in enhancing the size and quality of infrastructure growth.
Yesterday, while addressing the AIIB Board of Governors meet, Jaitley said India is preparing a basket of projects worth USD 2-3 billion for funding from AIIB in several areas including urban development and energy and offered to set up an office of the China-backed bank in New Delhi.