New Delhi: 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.

Speaking at 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.''

The conference, which was also addressed by Montek Singh Ahluwalia, deputy chairman, Planning Commission, discussed the investment opportunities in Indian Infrastructure for US and Indian firms.

The US-India 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 of honour.

The conference 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.

Welcoming 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.

Expressing 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.

Talking on 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.

Ahluwalia 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, Reliance Industries.

The conference 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 Pvt Ltd.

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 of India

Speakers and 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.

The 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.

The 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.