Further measures to boost investment in the infrastructure sector

Union Finance Minister Yashwant Sinha, in his Union Budget for 2002-03 presented to the Parliament on Thursday, said the Centre is continuing efforts to attract private sector investment in the infrastructure sector to supplement public investment.

The flow of investment has however been slow except in the telecom sector. Sinha has therefore proposed to take the following measures to facilitate faster private investment in infrastructure facilities:

1.An Infrastructure Equity Fund of Rs 1000 crore will be set up to help in providing equity investment for infrastructure projects. Contributions to the Fund to be managed by the Infrastructure Development Finance Company Limited (IDFC), would initially be made by public sector insurance companies, financial institutions and some banks.

2.An institutional mechanism is being set up to coordinate the debt financing by financial institutions and banks of infrastructure projects larger than Rs 250 crore. IDFC will act as the coordinating institution with primary responsibility for different sectors being shared with the IDBI and ICICI.

3.Public private partnerships will be encouraged for the provision of infrastructure facilities, the modalities for which are being worked out by a Task Force.

4. Public Investment in key infrastructure sectors is also being sharply stepped up. Plan outlay inclusive of internal and extra budgetary resources in power, roads and national highways and railways is being increased by 22%, 39% and 23% respectively, to a total of Rs 37,919 crore.

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