India's infrastructure spend inadequate

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India needs about Rs 27,60,000 crore of investment in infrastructure development over the next 10 years, according to Mr J.P. Nayak, President (Operations) Larsen and Toubro .

He told the press here on Tuesday that India's current spend on infrastructure is about 3.5 per cent of the gross domestic product (GDP), which was inadequate. He quoted a World Bank estimate saying that between 2005 and 2010, India would need to invest 3.82 per cent of its GDP simply to maintain existing infrastructure, and a further 3.06 per cent to build it further.

The problem, he said, is that traditionally about 80 per cent of infrastructure spend comes from the Government, which is under pressure to cut fiscal deficit. Consequently, the money has to come from the private sector, banks, international financial institutions, and the capital markets.

In this context, the Confederation of Indian Industry (CII) will organise Suminfra 2006, a summit on sustainable public-private partnerships (PPP) in infrastructure development in the Southern States, on August 3 and 4.

Mr Nayak, as Chairman of the event, said that the main purposes of the summit include pointing out opportunities for private sector involvement in infrastructure in the South, showcasing previous private sector experiences with PPPs in infrastructure, and helping financial institutions understand the issues related to such projects, and their `bankability.'

He said that the summit is significant because India has one of the most extensive transport systems in the world, which includes 3.2 million kilometres of road, 63,000 kilometres of railways, over 150 seaports, 12 international airports and over 90 domestic airports.

Taken from Business Line

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