India would need $500 bn in private investments for 8% growth in 12th Plan: Montek

At least half of the $1 trillion investments needed in the infrastructure sector in India during the 12th Plan period (2012-17) has to come from the private sector, if the economy is to achieve an 8 per cent average annual growth during the period, Planning Commission deputy chairman Montek Singh Ahluwalia said today.

"This (8 per cent annual economic growth) will not happen if roughly 50 per cent (of the $1 trillion investment target) cannot come from private sector", he said while addressing a FICCI conference in Delhi.

With a deficit-stricken government hamstrung to increase investment outlays, the only alternative is private investment, either domestic or foreign, he pointed out.

"We should be clear about it that there is no prospect or zero prospect of being able to significantly increase government contribution simply because resources won't be there as the demand for resources for health and education is huge", Ahluwalia said.

With a low growth rate in the current fiscal, the economy should achieve growth rates above 9 per cent in the last few years of the Plan to achieve an 8 per cent average growth rate for the Plan period, he pointed out.

"If the intention is to put the economy on to a path which is outlined in the 12th Plan that you would have average of 8 per cent (growth rate) in the five-year period, then you have to put the economy on 9 per cent growth rate in the last couple of years", he said.

The Central Statistical Office (CSO) has estimated 2012-13 economic growth at 5 per cent, the first year of the 12th Plan, while the prime minister's economic advisory council has projected the country's economic growth for the current fiscal at 6.4 per cent.