India needs $550 bn in 5 yrs: Investment panel
Ratan Tata presents report to PM who has asked nine ministries for inputs within a month.
The high-profile Investment Commission, headed by Ratan Tata, has said that India needs to attract investments of up to $550 billion in the next five years if it wants to become an economic powerhouse.
Tata had presented the report to Prime Minister Manmohan Singh last month. The prime minister has now asked nine central ministries, including petroleum, power, civil aviation, telecommunications, textiles, tourism and food processing, for inputs within a month on what they intend to do about this.
A government official told Business Standard that the ministries would have to suggest measures to overcome impediments like poor infrastructure and labour inflexibility among others. Once this exercise is over, the Prime Minister’s Office will finalise the investment road map.
The commission has identified sectors like roads and highways, energy, civil aviation, textiles and garments, automobile components, real estate, construction, tourism and food processing as high priority areas.
In its report, the commission pointed out that the roads sector alone required investments of $30 billion by 2010. Given that road projects in the country are too small to attract big international players, the report has recommended that contracts be awarded on a build-own-transfer basis for projects of 300-500 km in length to attract international firms. The commission has also mooted the idea of private maintenance of highways.
Similarly, the report says that the power sector needs investments of $140 billion in five years to generate 90,000 Mw of electricity. At present, investment in this sector stands at $54 billion.
Highlighting the importance of the coal sector, the commission has said the sector needs investments of around $30-40 billion over the next decade to double production from 240 million tonnes at present.
Until now, the sector has attracted investments worth only $2.5 billion. The report also calls for major policy measures like doing away with Coal India’s monopoly on mining and sales.
The telecommunications sector needs investments of around $22 billion by 2010. For this, the report calls for putting the 74 per cent foreign direct investment norm on the automatic route.
The high-profile Investment Commission, headed by Ratan Tata, has said that India needs to attract investments of up to $550 billion in the next five years if it wants to become an economic powerhouse.
Tata had presented the report to Prime Minister Manmohan Singh last month. The prime minister has now asked nine central ministries, including petroleum, power, civil aviation, telecommunications, textiles, tourism and food processing, for inputs within a month on what they intend to do about this.
A government official told Business Standard that the ministries would have to suggest measures to overcome impediments like poor infrastructure and labour inflexibility among others. Once this exercise is over, the Prime Minister’s Office will finalise the investment road map.
The commission has identified sectors like roads and highways, energy, civil aviation, textiles and garments, automobile components, real estate, construction, tourism and food processing as high priority areas.
In its report, the commission pointed out that the roads sector alone required investments of $30 billion by 2010. Given that road projects in the country are too small to attract big international players, the report has recommended that contracts be awarded on a build-own-transfer basis for projects of 300-500 km in length to attract international firms. The commission has also mooted the idea of private maintenance of highways.
Similarly, the report says that the power sector needs investments of $140 billion in five years to generate 90,000 Mw of electricity. At present, investment in this sector stands at $54 billion.
Highlighting the importance of the coal sector, the commission has said the sector needs investments of around $30-40 billion over the next decade to double production from 240 million tonnes at present.
Until now, the sector has attracted investments worth only $2.5 billion. The report also calls for major policy measures like doing away with Coal India’s monopoly on mining and sales.
The telecommunications sector needs investments of around $22 billion by 2010. For this, the report calls for putting the 74 per cent foreign direct investment norm on the automatic route.
posted by sandeepmoonka at 1:45 AM
4 Comments:
Hi,
Quite an informative post in terms of what we as a country need financially. Roads, Power should be high on agenda but some socail senses should prevail while the numbers are crunched. Moonka, good post i hope you keep informing us with all the recent development in investment circle, which i'm very interested in. BTW, if you get time then do comment at my blog.
God Bless
Sam
This comment has been removed by a blog administrator.
Hi,
Its a forte to read between the lines and abstract the relevant information from general news. Good work sandeep!!.
Anybody would agree hands down to the paucity of capital investment in the infrastructure sector for a developing country like India. Let us narrow down our viewpoint to our own city first. Though the new chief minister has started major expansion of roads and thinking longterm on public and corporate needs, the procurement of land for these developments is taking undue time due to which there is a chance of delay in these projects. And we all know the effects of delay in such projects, public sector work culture and corruption will usurp the major chunk of the Malai(believe me, its colloquial in TOI).
Thanks and regards,
Rajdeep.
In the fiscal year 2005-06 (ended on 31 March 2006)
foreign direct investment (FDI) in India reached to $7.5b.This year it will
cross $10 billion. However India has a long way to go to catch up China's
FDI of $60 billion and right now the main challenge for the Indian economy to
sustain its high economy growth rate is to invest heavily on infrastructure
development.
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