The Finance Minister, Arun Jaitley, on Thursday stressed upon the need for India to quickly perfect the “funding model’’ for filling infrastructure deficit and thereby help keep the economic growth rate at current high levels going.
“I think our model is in the process of evolving. This model has to be perfected to keep the growth rate going. If India is to grow faster than 7.5-8 per cent, infrastructure is the key,’’ Jaitley said at seminar on ‘Best Practices in PPPs and Long Term Infrastructure Financing’ in the capital.
This day-long knowledge exchange seminar was jointly organised by the Finance Ministry and Confederation of Indian Industry (CII) in the run up to BRICS Summit in October.
India has assumed the chairmanship of BRICS during 2016.
In his address, Jaitley highlighted that there cannot be an one-size-fits all solution for bridging infrastructure deficit.
“Each country has been experimenting its model. In different spheres, we are attempting different models. Some with higher success and some with lower success,’’ Jaitley noted.
India has been experimenting several innovative modes of infrastructure financing, including Infrastructure Development Funds (IDFs), Infrastructure Investment Trusts (Invts), Real Estate Investment Funds (REITs) and National Infrastructure Investment Fund (NIIF).
Jaitley said that although NIIF has become operational, it will start its major activity in a few days from now.
He said that a large number of international organisations, including sovereign wealth funds, have made commitments towards NIIF and that the Centre was awaiting their contributions to specific funds under NIIF.
Jaitley said that he was conscious of the fact that the ‘State’ had the responsibility in meeting the infrastructure needs of its citizens.
He highlighted that public investments in infrastructure had been on the rise and described the highways sector performance over last two years as a clear “success story’’.
Speaking on the occasion, Economic Affairs Secretary Shaktikanta Das said that NIIF had actually posed several challenges to the Finance Ministry.
In the initial interactions that were held with prospective investors, it appeared they would be interested in investing into the umbrella fund (mother fund), which will invest in various infrastructure projects, Das said.
However, when further interactions happened, it came out that the long-term funds were interested in investing in dedicated sectoral funds than any all purpose/multipurpose funds, he said.
“We had to therefore recast the NIIF. Now we have two sectoral funds — one for highways and the other for clean energy,” Das said.
Meanwhile, Das also said that the Centre was taking special focus on public private partnership (PPP) projects in railways to contribute to India growth story. Charles Haley Authentic JerseyShare This