FDI flows to infra low, says Unctad

Foreign direct investment (FDI) inflows into India’s infrastructure sector are very low compared with other sectors like financial services and information technology, according to the Unctad’s World Investment Report, 2008.

Taking into account estimates provided by the World Bank and the Planning Commission, the report says that this low incidence of FDI inflows into sectors like energy, roads, telecommunications, ports, railways and airports is despite the huge infrastructure investment deficit that the country faces.

“Over the 2007-12 period, India will need investments averaging $99 billion per annum in 10 major infrastructure segments to support planned annual GDP growth of 9 per cent,” the report said. The public sector will have to provide 70 per cent of this investment.

The reports says that FDI has played a very small role in the overall infrastructure funding. “Between 2000 and February 2008, India received an average of only $1.3 billion FDI per annum in electricity, roads, telecommunications, ports, railways and airports.”