Govt sets up panel to evolve infra funding strategy

Faced with the challenge to raise an estimated $1 trillion for developing the country's infrastructure, government today set up a high-level committee to evolve a strategy in this regard.

The committee headed by former RBI Deputy Governor Rakesh Mohan would submit its report in 18 months, an official statement said.

It would suggest steps for improving capital markets for garnering long term savings and facilitating flow of foreign investment.

The committee would assess the investments required to be made by the central and state government, public sector undertakings (PSUs) and the private sector in the ten major physical infrastructure sector projects.

India is aiming to double its investment in infrastructure to about $1 trillion during the 12th Plan (2012-17) from an estimated $500 million in the current Plan.

In rupee terms the investment target for infrastructure sector projects during the 11th Five Year Plan was pegged at Rs 20,50,000 crore

It would be about Rs 41,00,000 crore (at constant 2006-07 prices) in the next Plan.

It is expected that half of the investment target for infrastructure would come from the private sector and the balance from public sector undertakings.

The panel will also identify the regulatory or legal impediments constraining private investment in infrastructure, and make specific recommendations to facilitate their removal.

The high-level panel for infrastructure funding will include Secretary, Department of Economic Affairs, Secretary, Department of Financial Services, Chairman, Insurance Regulatory and Development Authority and Chairperson, Pension Fund Regulatory and Development Authority.

Besides, the panel will include RBI Deputy Governor and chief executives of State Bank of India, Life Insurance Corporation, Power Finance Corporation, ICICI Bank and Infrastructure Development Finance Company Limited.

Other members would include Uday Kotak of Kotak Mahindra Bank, G M Rao, Chairman, GMR Group,  Sanjay Reddy, Managing Director, GVK Group and Country Head of Goldman Sachs, Madhav Dhar.

Chairman, Railway Board, Secretary, Chief Economic Advisor in the Ministry of Finance and secretaries in the ministries of Power, Road Transport and Highways, Urban Development Secretary, Petroleum and Natural Gas, Telecommunications, Water Resources would be special invitees to the Committee.

The convener of the panel would be Gajendra Haldea, Adviser to Deputy Chairman, Planning Commission.