In what could put a further pressure on India’s sagging growth story, private sector investment inflows into various infrastructure projects including power, roads, airports, ports and telecommunications during the 12th plan period (2012-17) — projected at a whopping Rs. 27 lakh crore by the Planning Commission — are expected to take a major hit.
The high-level committee on infrastructure financing chaied by former Reserve Bank of India (RBI) governor Rakesh Mohan has proposed a downward revision of the private sector investment targets proposed by the Planning Commission for the infrastructure sector.
The committee has also formed various sub-groups to provide new estimates for private investments during the 12th plan.
For example, IDFC in consultation with the Planning Commission, the Central Electricity authority (CEA), Power Finance Corporation (PFC) and major private sector developers will provide its estimates for private investment in the power sector. Similarly, ICICI Bank in consultation with the Department of Telecommunications (DoT) has been asked to provide similar estimates.
The move follows discussions among committee members that balance sheets of private telecom players are very stretched and given the current environment, the projected private investment in the sector seems too high to materialise.
Also, private investors expressed concerns over shortage of essential raw materials such as coal and gas for the power sector.
The committee has also called for a greater role for the IIFCL. "The committee members and special Invitees were requested to provide their comments on the consultation paper to the Planning Commission," said a senior government official. The total investment during the 11th Plan was anticipated at Rs. 20 lakh crore against the projected Rs. 21 lakh crore.