Pvt cos expected to meet half of 12th Plan infra target:Pranab

Finance Minister Pranab Mukherjee today said the private sector is expected to play a major role in financing infrastructure projects in the country over the next five years, accounting for about half of the targeted investment of USD 1 trillion.

Finance Minister Pranab Mukherjee today said the private sector is expected to play a major role in financing infrastructure projects in the country over the next five years, accounting for about half of the targeted investment of USD 1 trillion.

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Noting that infrastructure financing is one of the key concerns for the country, Mukherjee said while the 11th Five-Year Plan infrastructure finance target is expected to be met, preliminary estimates for the 12th Plan (beginning next year) indicate a substantial 30 per cent gap in financing of the targeted investment.

"Public-Private Partnerships (PPP), wherein the private sector is participating in the construction and operation of public infrastructure assets, is one of the most important developments in infrastructure delivery in our country," Mukherjee said at a bilateral meeting with UK Secretary of State for Business, Innovations & Skills Vince Cable here.

He further said both countries can learn a lot from each other's experiences and expressed his happiness at the launch of the Britain India Infrastructure Group (BIIG).

"BIIG is a major step forward to facilitate the development of infrastructure in India with the involvement of senior officials from both sides and the major private sector players in infrastructure development," he said.

He said BIIG has been formed at an opportune time, with India gearing up to almost double the investment seen in the Eleventh Plan (2007-12) during the Twelfth Plan (2012-2017).

The Finance Minister further said he would like the National Skill Development Corporation (NSDC) to have tie-ups with overseas companies to bridge the skill gap in the country, particularly with respect to the infrastructure sector.

"Besides creating skilled manpower, we also want to develop and set up a vibrant bond market in the country to facilitate infrastructure financing," he added. He said as per the existing guidelines, Indian companies can issue bonds in the domestic currency, which can be traded in the corporate bond market in India.

He said said that foreign institutional investors can collectively invest up to USD 20 billion in these bonds, with a "carve out" of USD 5 billion for infrastructure projects. The Finance Minister said the creation of a regulatory framework for credit enhancement is also under active consideration. Vince Cable said various UK companies are interested in investing in this sector in India and hoped BIIG will facilitate investment by UK companies in the development of infrastructure in India.