'India needs more infrastructure spending'
Finance minister says India has to raise investment in infrastructure to 8 per cent of its GDP in the next five years.business Updated: Sep 06, 2007 22:22 IST
India has to raise investment in infrastructure to 8 per cent of its gross domestic product in the next five years from 4.6 per cent now if the economy is to grow by 9 per cent a year, the finance minister said on Thursday.
India's economy grew 9.4 percent in 2006/07, its fastest rate in 18 years and second only to China amongst major economies, but poor infrastructure is a threat to sustaining high growth rates.
"Our infrastructure deficiencies have become more visible because of high growth. The most visible indicators of overstretched infrastructure are India's congested highways, airports and ports," Palaniappan Chidambaram told a parliamentary panel that was closed to the public, according to a government statement.
"To sustain 9 per cent GDP growth, investment in infrastructure should be increased from 4.6 per cent to around 8 per cent of GDP over the Eleventh Plan period (2007/12)," he said.
A government-appointed panel has estimated India needs $475 billion of investment to upgrade its infrastructure.
"It is imperative to explore avenues for increasing investment in infrastructure through a combination of public investment, public-private partnerships and occasionally, exclusive private investments wherever feasible," Chidambaram said.