India plans to launch a Rs50,000 crore fund to build the country's inadequate infrastructure, with 40 per cent of the corpus from overseas investors. The government proposes to raise $4.4 billion (Rs20,000 crore) from overseas pension, insurance and sovereign wealth funds and the remainder from domestic institutions.
The decision to create the fund was taken at a meeting in New Delhi on Wednesday, headed by Planning Commission deputy chairman Montek Singh Ahluwalia. Deepak Parekh, the chairman of Housing Development Finance Corp and often a troubleshooter for the government, will reportedly head the committee.
A committee will be set up to chalk out details in the next two weeks, and the fund raising exercise will start at the Indo-US CEO forum next month. Ratan Tata, chairman of the diversified Tata Group, and civil and military avionics maker Honeywell's chairman David Cote co-chair the forum.
The committee may meet on Tuesday in Mumbai. Its members ''will look into innovative methods that can be used to bridge the widening gap in infrastructure financing'', Parekh told The Economic Times.
''There is always a shortage of long-term finance in infrastructure projects. The objective is to meet this demand. It's too early to comment on the constitution of the committee or its functioning,'' he added.
The Planning Commission had floated a concept paper in February to set up the fund that would help meet long-term needs of public private partnership projects (PPP) by tapping foreign and domestic pension and insurance funds, sovereign funds and multilateral institutions.