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HindustanTimes Sun,20 Apr 2014

Government forms panel for big infra fund push

Anupama Airy and Mahua Venkatesh , Hindustan Times  New Delhi, May 16, 2013
First Published: 22:07 IST(16/5/2013) | Last Updated: 22:10 IST(16/5/2013)

Looking to get back on the 8% growth path within the next couple of years, the government has constituted a group of experts including ICICI Bank managing director Chanda Kochhar, State Bank of India chairman Pratip Choudhuri, financial services secretary Rajiv Takru and senior Planning Commission and RBI brass to find out ways to increase flow of funds into the infrastructure sector.

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The infrastructure sector needs a whopping $1 trillion in funds during the next 4-5 years.

“The government’s high-level committee on infrastructure financing under Deepak Parikh constituted this group of experts,” a senior government official told HT.

Explaining the rationale and terms of the committee, he said most infrastructure projects are being executed through a special purpose vehicle (SPV) mode and the problem of inclusion of SPV exposure poses a major hurdle in infrastructure financing.

“If a promoter’s guarantee is taken, most Indian companies may exhaust their headroom at an early stage, constraining the scope for further investment.”

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