United States-based banks and private equity funds are keen to invest in India’s infrastructure and have sought greater opening up of the country’s financial sector, a top US government official said on Thursday.
“Infrastructure is no small challenge. There is a need for opening up of the corporate bond market and financial sector liberalisation,” David H McCormick, Under Secretary in the US Treasury Department, said.
India would need over $500 billion in the next five years to fund its massive infrastructure needs that included highways, ports, airports, power and water supply and sewage among others.
McCormick underlined the need for developing a better regulatory and legal framework to enable greater private investment in India’s fledgling infrastructure sector.
The government is trying to work out various innovative funding options including relaxation commercial borrowing (ECB) norms to fund infrastructure projects.
Analysts feel lack of credible and bankable infrastructure projects along with absence of long-term financing instruments as the major weaknesses affecting the growth of the infrastructure sector in the country.
The government is also examining various options for active management of the country’s burgeoning foreign exchange reserves for infrastructure projects.