India needs to raise $488 billion for infrastructure over
the next five years and in order to sustain growth of
the economy, it is imperative to raise infrastructure
spending from 5 per cent to 9 per cent 0f GDP by 2012,
finance minister P Chidambaram said in New Delhi today.
the India Infrastructure Investment Conference 2007 in
the capital today, the finance minister said, "We
believe that 70 per cent of this investment must come
from the public sector and 30 per cent from the private
sector. The drivers of infrastructure investment would
be Public Private Partnership and opening key sectors
to private investment.''
which was also addressed by Montek Singh Ahluwalia, deputy
chairman, Planning Commission, discussed the investment
opportunities in Indian Infrastructure for US and Indian
CEO Forum, co-chaired by William B Harrison, former chairman
and CEO, J P Morgan Chase & Co and Ratan N Tata, chairman,
Tata Sons, organised the conference with an objective
to provide inputs to central and state government officials
to attract US firms for investment in infrastructure.
Henry M Paulson Jr, US Treasury Secretary was the guest
presented the huge infrastructure investment opportunities
available in India and also enabled participants to share
experiences and best practices in infrastructure investments.
The conference provided an opportunity for networking
between US firms and leading Indian infrastructure developers
and financiers who may serve as potential partners.
the representatives from India and the US, Ratan Tata
urged the business communities to effectively utilise
the forum to strengthen the economic relations between
both the countries. "With inadequate infrastructure
availability in India, this sector is seen as a high priority
area", said Tata. "Till date, US participation
in Indian infrastructure projects has been low. With the
US bringing in advanced technology and expertise in infrastructure
financing and India poised for major development, both
sides should work towards developing infrastructure projects."
On the major
challenges in financing infrastructure projects, the finance
minister recommended that pension funds should be directed
to infrastructure projects, and that external commercial
orrowings (ECBs) should be more flexible and a "broad,
deep and active corporate bond market should be developed".
He also mentioned that public funds should not be employed
in private projects rather private funds should be deployed
in public projects.
confidence in the country''s infrastructure capacity, the
finance minister said the country is capable of absorbing
such huge requirement for the infrastructure projects,
and encouraged the visiting corporate heads of United
States to pass the positive message to their counterparts
on the existing opportunities in India.
improving India''s physical infrastructure Henry M Paulson
said, "Over 30 US firms represented at this conference
are a resource for realising the $500 billion estimate
for investment in roads, ports, housing, railways, airports,
and telecommunication over the next five years. He also
talked about taking forward the proposal for developing
Mumbai as an international finance centre.
Later in the
day, Montek Singh Ahluwalia participated in a session
with Allan Hubbard, director, National Economic Council
(US) to present an overview of the infrastructure sector
in India. He said there were four sets of companies that
would be interested in the infrastructure sector in India
- technical consultants, construction companies, project
developers and financiers.
stated that while a business-as-usual approach would lead
to investment of about $330 billion, the participation
of all these companies will enable a significant step
up. The session was moderated by Mukesh Ambani, chairman,
is being organised to facilitate greater US investment
in India''s infrastructure development. Besides government
dignitaries, the conference includes participation of
infrastructure finance professionals from top US and Indian
financial firms, top Indian and US infrastructure development
firms and Indian central and state government officials
focused on infrastructure development.
The other prominent speakers and panelists from Indian
Industry included Tarun Das, chief mentor, Confederation
of India Industry (CII), Dr. Rajiv B Lall, managing director
and CEO, IDFC Ltd., G.V. Sanjay Reddy, vice chairman,
GVK Industries Ltd., and Vinayak Chatterjee, co-chairman,
CII Infrastructure Council and chairman, Feedback Ventures
Participants from the central government included Dr D
Subbarao, finance secretary, government of India, Ashok
Chawla, secretary, ministry of civil aviation, government
of India, M Ramachandran, secretary, ministry of urban
development, government of India, Anil Razdan, secretary,
ministry of power, government of India, and Brahm Dutt,
secretary, ministry of road transport and highways, government
panelists from US government agencies and private sector
companies include James Lambright, chairman and president,
Export-Import Bank of the United States, Joseph Azelby,
managing director, J P Morgan Chase, Emil Henry, managing
director, Lehman Brothers, Richard H. Frank, chief executive
officer, Darby Overseas Investments and Tracy Wolstencroft,
managing director and head, (global infrastructure and
municipal finance), Goldman Sachs.
US-India CEO Forum
With trade growing at over 20 per cent annually between
the United States and India, the two countries have embarked
on a new era of partnership encompassing an array of strategic
interests. The US-India CEO Forum, constituted by President
George W. Bush and Prime Minister Manmohan Singh in July
2005, was one of the initiatives for enhancing bilateral
trade and investment. Comprising 10 CEOs each, from both
countries, the CEO Forum was given a mandate to develop
a roadmap for increased partnership and cooperation between
the two countries at a business level.
CEO Forum presented its report and recommendations for
enhancing trade and investment, titled US-India Strategic
Economic Partnership in March 2006. The CEO Forum continues
its engagement by providing inputs to the two governments
on impediments, issues and opportunities towards enhanced
trade and investment flows and, where possible, also facilitates
the implementation of select recommendations. The forum
aims to create an ''enabling environment'' by bringing business
leaders together to build the bridges of the 21st century.