The finance ministry will soon begin consulting state governments and central ministries and departments to create a shelf of projects which can be taken up for execution under the public-private partnership and viability gap funding schemes.
Speaking at the infrastructure summit on Saturday, Finance Minister P Chidambaram said the government was open to suggestions for new sources of funding for infrastructure projects.
Chidambaram pointed out that there was no problem of funds, but the dearth of adequate number of projects.
So far, under viability gap funding we have received 31 proposals of which 12 have been given in-principle approvals. The proposals are, however, restricted to the ports, roads, highways and rail segments, he said.
In order to assist project formulation, a list of consultants that can be tapped by states to undertake feasibility assessment of projects will also be drawn up by IDFC.
He pointed out that credit growth at 31 per cent was not a worrying sign as long as funds were made easily available to productive sectors like manufacturing, agriculture and services, which generate employment.
Chidambaram said that states could also make use of the Asian Development Banks technical assistance programme under which the Centre could hire consultants and make them available to the states.
Indias infrastructure sector alone could absorb foreign investment to the tune of $150 billion over the next few years. The investment flow during the 11th Plan is expected to grow to 8-8.5 per cent of the GDP from the present 4 per cent. On the issue of foreign direct investments, as a safe rule we can expect 2 per cent of the GDP as inflows. It is within the limits of prudence and the key for balance of payments (to be) in good shape.
The investment in infrastructure will almost have to be at the same rate as the economic growth we are seeking to achieve, he said, adding that the rapid pace of growth had exposed the infrastructure deficiencies in the country, particularly in the highways, port and airport sectors.
Infrastructure had long remained in the public domain which resulted in inadequate development. Hence, there was a need for private players that are flush with funds to invest in the sector, he added.