Infra sector’s wishlist for Budget 2011

by khalid on 18/02/2011 · 0 comments

India’s Infra sector, crucial sector for maintaining 9% or perhaps double-digit economic growth. The infrastructure investment is a key factor to attain higher economic growth. A recent McKinsey study estimates that if current trends continue, India could suffer a GDP loss of USD 200 billion or 10% of GDP by FY17. The three key reasons for this are shortfalls in awarding projects, time and cost overruns in construction phase and potential funding shortfalls.

If the government is serious about addressing the funding bottlenecks for the infrastructure sector, it will have to start taking immediate steps starting from this year itself. That would not only involve the creation of dedicated debt funds, it would also mean a regulatory framework for developing a deep and robust bond market.

The need for funds is enormous with the requirement pecked at Rs 12,73,557 crore in FY11 and FY12. Of this, Rs 7,07,764 crores are expected from debt and equity.

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