Absence of long-term financing instruments and lack of regulatory architecture were holding back infrastructure development in India, and the current global financial meltdown could be an opportunity to accelerate reforms, experts said on Monday.
“Improving the regulatory environment would be the fastest way to kick-start investment in infrastructure. The sector continues to suffer from old chronic diseases with some new virus infections,” Rajya Sabha member and former revenue secretary N.K.Singh told delegates at the Indian Economic Summit organised by the World Economic Forum and the Confederation of Indian Industry (CII) here.
India will require an estimated $500 billion to fund its infrastructure projects by 2012. “The present financial crisis should be used as an opportunity to accelerate ongoing reforms in the infrastructure sector to kick-start spending,” Singh said.
The global bank credit crisis is threatening to delay several of India’s major infrastructure projects by many months.
“Investment in infrastructure will be the key driver of growth,” Anil Ahuja, managing director India, 3i Singapore, said.
Gunit Chadha, managing director and chief executive officer, Deutsche Bank, India recommended that infrastructure be included in the list of priority sectors for banks to boost credit availability for the sector.
Ala'a Al Yousuf, Chief Economist, Gulf Finance House, Bahrain said that prioritising public expenditure and working more closely with the private sector will help India bridge its infrastructure gap.
Arun K. Nanda, executive director and president, infrastructure development, Mahindra & Mahindra, India said the demonstration effect of good project implementation will help improve investor confidence.
Rajesh Subramaniam, Senior Vice President, International Marketing, Fed Ex Services, USA, emphasised that an encouraging regulatory environment was required at the moment to improve overall infrastructure delivery and quality.