Finance minister P Chidambaram today said that India required enormous investment in infrastructure sector as infrastructure projects have long gestation periods and, in most cases, are not financially viable on their own. 

The advantage of long-tenure and low-interest Japanese overseas development assistance (ODA) was beneficial for funding large infrastructure projects in the country, he said at the 'note exchange' ceremony, held in New Delhi today for the Japanese ODA package of ¥185.575 billion (approximately Rs7074 crore) for the second batch of FY 2007. 

The notes were exchanged between Kumar Sanjay Krishna, joint secretary in the ministry of finance and Hideaki Domichi, ambassador of Japan to India.

Appreciating the increasing commitment of Japanese ODA to India since FY 2003-04, Chidambaram said that with this commitment the total ODA loan commitment from Japan in FY 2007 amounted to ¥225.13 billion or Rs8582 crore, up 21.76 per cent from last year's commitment of ¥184.893 billion. 

This is also the highest ever ODA loan commitment from Japan to India and India continues to be the highest recipient of ODA from Japan, the he added.

Chidambaram stated that this year's ODA package included projects which are very important to India, like the Delhi MRTS, Kolkata East-West, Hyderabad Outer Ring Road and Tamil Nadu Urban Infrastructure development Projects. 

He said that the inclusion of Hogenakkal water supply and fluorosis mitigation project in the ODA package served a long-standing demand of the people of Tamil Nadu.

In the last few years relations between India and Japan had steadily progressed based on India-Japan global partnership, Chidambaram said. The visits of the Indian prime minister to Japan in 2006 and the return visit of the Japanese prime minister to India in 2007 have further strengthened the India-Japan global partnership by adding greater substance to the bilateral relations based on India-Japan global partnership, Chidambaram said.

With today's note exchange, Japan has committed Rs7,074 crore as loan to India to fund the following seven infrastructure projects:

The cumulative commitment of ODA from Japan including today's exchange of notes has reached ¥2,662.56 billion. In the first batch of FY 2007 in  August, the government of Japan had committed ¥39.55 billion for two projects - Goa water supply and sewerage and Maharashtra transmission system projects. (See: Japanese overseas development assistance to cover projects in Goa, Maharashtra)

The Japanese ambassador said that the partnership between India and Japan was not only robust, but also growing. He said that the Japanese believe that India would grow and become one of the largest economies in the near future. He mentioned that Japan and India were cooperating on various important projects throughout the country.

He appreciated the fact that the Delhi Metro Project is often referred to as a "shining example" of the Japanese cooperation to India. The Ambassador recognised infrastructure building as one of the top priorities of the government of India and mentioned that from the Japanese point of view, infrastructure was also important for investors to come to India.

The ambassador mentioned that in the overall framework of "strategic global partnership" between Japan and India, Japan would expand their cooperation, like Dedicated Freight Corridor Project or Delhi Mumbai Industrial Corridor Project.