'India needs foreign equity urgently'
Finance Minister P Chidambaram has said the country needs as much as $320 billion in the infrastructure sector over the next five years.india Updated: Feb 06, 2007 17:46 IST
Inviting foreign equity to build India's infrastructure, Finance Minister P. Chidambaram Monday said the country needed $320 billion in the sector over the next five years.
"About $320 billion investment is required in building India's infrastructure from the private sector based on public-private partnership (PPP) over the next five years," Chidambaram told a seminar on infrastructure organised here by the World Bank.
He also highlighted the government's move in allowing 100 percent foreign direct investment in most of India's infrastructure sectors.
"The government has allowed 100 percent foreign equity in most infrastructure sectors and I urge foreign investors to view it as an opportunity," the minister told the conference attended by global investors.
According to Chidambaram, PPP model was the only lasting solution to improving the country's ailing infrastructure, which is acting as the main deterrent in the growth of India's economy.
Encouraging increase in savings by domestic households in India, the minister said: "Twenty-two percent savings comes from Indian households and to raise investments for the growth of infrastructure, we need the savings of other countries as well, not only our savings."
Chidambaram also underlined various constraints of weakness in regulatory framework, inadequate capacity of the market to meet long-term equity and debt financing, lack of bankable projects and lack of capacity in public institutions to manage the PPP process.
Welcoming frequent comparisons between the two emerging economies of India and China, he said: "There is much to learn from China and we wish to emulate China in infrastructure."