The private sector needs to increase its participation in infrastructure spending, even as three-fourth expenditure is borne by the government and it is looking to double the infra investment to Rs 140 trillion by 2030, said M. Nagaraju, secretary, Department of Financial Services. (DFS), Ministry of Finance.
India needs to spend 8-10 per cent of Gross Domestic Product (GDP) on infrastructure for sustaining high single digit growth rate over the next couple of decades.
“Achieving this will require more than just budgetary outlays,” he said.
“So far, three-fourths of infrastructure spending is borne by the government. This must change and there should be greater participation by the private sector. For whatever that is required to invest, the government is ready to build that ecosystem,” Nagaraju said while addressing the Infrastructure conclave organized by National Bank for Financing Infrastructure and Development (NabFID).
He said the government has made significant efforts to make infrastructure a safer asset class, made changes in concession agreements, creation of stronger counterparties and setting up institutional arrangements like insolvency and bankruptcy code.
The government has supported setting up of The National Asset Reconstruction Company Ltd and specialized development financial institutions like NabFID. These efforts are supported by other initiatives like multi-modal connectivity for movement of goods and people, and national monetization plan, which seeks to unlock the value of older assets for new asset creation. There is also a scheme for states providing long-term interest free loans for creating durable assets, Nagaraju added.
“The country is home to the largest entrepreneurial ecosystem with millions of micro, small and medium enterprises who are aspiring to grow bigger and better. Most importantly, we are building infrastructure at an unprecedented pace and investment rate has risen with enhanced budgetary focus on increase in the capital expenditure. Infrastructure assumes paramount importance, given its high multiplier impact,” he said.
The rapid pace of urbanization is underway, giving a lot of opportunity for investment and development. By 2036, approximately 40 per cent of the population of India will reside in towns and cities, contributing nearly 70 per cent of India’s GDP, he added.
First Published: Sep 12, 2024 | 5:39 PM IST
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