Infra panel revises 11th plan investment need to $492 bn

Given the huge task for building infrastructure projects in the country over the next five years, the Committee of Infrastructure...

Given the huge task for building infrastructure projects in the country over the next five years, the Committee of Infrastructure (CoI) has estimated the funding requirement to be around $490 billion as against the earlier figures that ranged between $340 billion and $370 billion.

Chaired by Prime Minister Manmohan Singh, the CoI in a paper released on Tuesday said that after taking into account a spill over of 15 per cent of the projected investment from the 11th Plan to the 12th Plan, “the expected infrastructure investment in 11th Plan would amount to Rs 20,18,709 crore (or $492 billion)”.

This figure according to the paper “is 2.45 times the amount (Rs 8,22,193 crore or $201 billion) anticipated to be achieved in the 10th Plan”.

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The paper that projects the investment requirement for the 11th Plan said that the calculations are based on sector-wise pipeline financing plans, combined with a detailed analysis of past trends. This analysis, it said “yields total investment in infrastructure during the 11th Plan of Rs 23,74,952 crore ($579 billion)”. It is part of these investments that are expected to spillover to the next Plan.

This is in contrast to an estimate done with log-linear “business as usual” projection for the 11th Plan that put the investment requirement at $280 billion.

A sectorwise break up for investment projections in infrastructure shows that of the $492 billion, the electricity sector’s investment requirements are the highest forming 30 per cent of the total projected requirement. In all other key sectors, such as roads, telecom, railways, irrigation and water supply and sanitation, the share ranges from 10 to 15 per cent of the total project requirement.

The paper also shows that investment requirements show a remarkable increase in the terminal years of the 11th Plan. The total investment spending in the last two years is projected to be more than 51 per cent of the total requirement.