Infrastructure means and includes the necessary items for a particular set up. In business, infrastructure means the necessary office and business premises, fixtures and furnitures , machineries etc. required for the business purpose. While for a country like India, Ifrastructure means the electricity and its generation plants, roads and buildings, railways and other modes of transportaion, and other governmental facilities required for the development and usage of citizens of India. In a country like India, Infrastructure plays major role for the development of the country. In India, we have planning commission under the Govt. of India who looks after the needs of development of Infrastructure.
Growth Potential
According to a consultation paper circulated by the Planning Commission, a massive US$ 494-billion of investment is proposed for the Eleventh Plan period (2007-12), which would increase the share of infrastructure investment to 9 per cent of GDP from 5 per cent in 2006-07. This translates roughly into US$ 40 billion of annual additional investment.
The projected sector-wise shares are: 30.4 per cent in electricity, 15.4 per cent in roads and bridges, 13.7 per cent in telecommunications and 12.4 per cent in railways among others. Significantly, 30 per cent of the total investment is expected to come from the private sector (including public-private partnership).
For this, the Government has already taken many proactive measures such as opening up a number of infrastructure sectors to private players, permitting foreign direct investment (FDI) into various sectors, introducing model concession agreements, taking up projects such as the National Highway Development Project and National Maritime Development Programme among others. Some of the projects planned for the next five years include:
- Additional power generation capacity of about 70,000 MW
- Construction of Dedicated Freight Corridors between Mumbai and Delhi, and Ludhiana and Kolkata
- Capacity addition of 485 million MT in major ports, 345 million MT in minor ports
- Modernisation and redevelopment of 21 railway stations
- Development of 16 million hectares through major, medium and minor irrigation works
- Modernisation and redevelopment of 4 metro and 35 non-metro airports
- Six-laning 6,500 km of Golden Quadrilateral and selected National Highways
- Construction of 1,65,244 km of new rural roads, and renewing and upgrading existing 1,92,464 km covering 78,304 rural habitations
Investment
With such huge opportunities opening up in this segment, private investment has been growing at a scorching pace. Already, telecommunications, construction and power together have attracted a combined cumulative FDI of US$ 6.815 billion over the period April 2000 to August 2007. In fact, these three account for about 17.38 per cent of the total FDI into the country during this period.
Simultaneously many India-dedicated infrastructure funds are being launched. In fact, infrastructure has been instrumental in emerging as the leading destination for private equity in Asia (excluding Japan). Some of the major players in this segment include 3i, Citigroup, Blackstone Atherstone India Invest, PFC, AMP Capital, Macquarie Infrastructure Group, DLF-Laing O'rourke among others. Funds raised through infrastructure schemes by mutual funds are likely to exceed US$ 5.07 billion in 2007 against US$ 634.69 million in 2006.
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