India needs to boost savings rate
The ASSOCHAM says India should improve savings to attract foreign funds, reports HT Corporate Bureau.india Updated: Oct 13, 2006 18:36 IST
India needs to attract foreign investment of $ 5-7 billion over the next five years in the infrastructure sector, for which there is a need to improve domestic financial savings to 40 per cent from the current levels of 30 per cent, says the Associated Chamber of Commerce and Industry in a study that will soon be
presented to the Planning Commission.
The report prepared by Rajiv B Lall, chairman of the chamber's infrastructure committee,highlights the need to use insurance and pension funds to raise money for infrastructure development.
Thisis possible only ifinstruments like government financial bonds are made more attractive for investors, Lall says.
Lall told an Assocham conference that India's spending on infrastructure, at $ 36 billion was 4.5 per cent of the gross domestic product (GDP), while China spent about four times that.
"India needs to spend about 7.5 per cent of its GDP which would be about $ 90 billion per year for the next five years to achieve sustainable infrastructure," he said.