Infrastructure Government: The
government on 7th October 2006, had pegged
investment requirements for the country's
infrastructure sector at Rs1,450,000 crore ($320 billion) against the earlier estimate of Rs700,000 crore ($150 billion). India should double gross capital formation in the
infrastructure sector to eight per cent by 2012 to sustain the current pace of
economic growth of over eight per cent, prime minister Manmohan Singh said.
Emphasizing the importance of
public works in speeding up
economic expansion and cutting poverty, the prime minister said better
infrastructure in neighboring China has helped the country attract $60 billion of foreign direct investment in 2005 alone, compared with India's $50 billion since 1991. He was inaugurating a conference on
'Building Infrastructure' in New Delhi.
China began opening its economy in 1978, 13 years before India, Manmohan pointed out, adding that this country too wanted more investments in
roads, ports and
factories to generate employment, accelerate growth and improve the lives of a third of its 1.1 billion people who live below the poverty line.
Pegging resource requirements for the
Infrastructure Government sector even higher at $363 billion over the next five years, finance minister P Chidambaram called for massive investments by the private sector to support of the government's efforts in this crucial area
"India's economy is expected to grow at rates above eight per cent in the 11th plan," he told participants of the conference, adding that unless investment grows at the same pace, it would not be possible to sustain the pace of
economic growth.
"The
infrastructure deficiency is visible because of high growth," he said. The country, he added, can absorb as much as $150 billion in direct investment from overseas to upgrade its
roads, ports, power plants and
airports.
Chidambaram said the rapid pace of
economic growth has exposed the
infrastructure deficiencies in the country. It is particularly obvious in congested
highways, ports and
airports, he added.
Infrastructure Government had long been in the domain of public sector, which resulted in inadequate development. Hence, there was a need for private participation in the sector. He said the country needed investments to the tune of Rs1,100,000 crore for
infrastructure development in the
Tenth Plan alone while it would require Rs2,200,000 crore for
investments in national highways, airports and
ports by the year 2012.
Historical Inflation Rates
