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To attract money, panel seeks power, rail tariff hike

business Updated: Oct 03, 2012 23:37 IST
HT Correspondent

To attract more private investment in the infrastructure sector, a high-level committee of the Planning Commission on Wednesday recommended increase in electricity rates and railway fares.

The committee on Financing of Infrastructure headed by HDFC chairman Deepak Parekh in its interim report to Prime Minister Manmohan Singh also sought 100% foreign direct investment (FDI) in the telecom sector. The current limit is 74%.

The committee has also suggested involving private players in modernisation of railway stations, construction of elevated suburban corridors in Mumbai, development of new freight corridors, high-speed rail corridors, and manufacturing of diesel and electric engines, coaches and wagons, apart from increase in railway fares.

It also asked the government to set up Expressway Authority of India to develop high speed expressways outside the National Highway Authority of India, which opts for conventional contract system.

To end supply problems in the power sector, the committee recommended setting up of another PSU to manage and award coal contracts under the Public Private Partnership mode. The proposal has been opposed by Coal India Limited.

"We have made several measures to attract more investment for infrastructure," Parekh told reporters after submitting the interim report.

The final report is expected by March next year.

The government, the report said, should draw "a time-bound action plan... with a view to improving the enabling environment for private investment, which is expected to finance about 47% of the projected investment during the 12th Plan".