India needs rupee bond market to fund infra: Pranab

Finance Minister Pranab Mukherjee today said India would have to develop a rupee-denominated long-term bond market to help fund the infrastructure sector, which would require $459-500 billion by 2012.

“India needs $459- 500 billion investment by 2012 to yield to the shortage of infrastructure and a substantial part of it will come from the bond market. It is vital for India to develop a rupee-denominated long-term bond market,” Mukherjee said. India’s gross domestic product growth should reach the 9 per cent level during the 11th Plan period and double digits by the 12th Plan period, he said, adding that the target was not to achieve a mere 9 per cent growth but to breach the barrier of double-digit growth.

On rising inflation, the finance minister said, “We are concerned with inflationary pressures, particularly food inflation. We have taken steps in this regard.” The government has already opened the zero duty import route for edible oil, sugar and pulses.

“Unfortunately, international prices of these commodities are also very high. There will be bumper sugar production this year,” he said.

The finance minister said there was a need to streamline the public distribution system and a sub-group of chief ministers would give a report on providing subsidised wheat and rice to people in the below-poverty-line category.

Mukherjee said the country was getting into the “next generation financial system” and two reports on reforming the Indian capital market and making Mumbai an international financial centre were being studied by the government.