India's infrastructure sector is poised for a big leap and offers significant investment opportunities for US businesses and other investors, Planning Commission Member B K Chaturvedi has said.
He asked American investors to have confidence in India and its market.
Investment in India's infrastructure sector -- which has been has been pegged at around $1 trillion over next five years -- has high potential, not high risk, Chaturvedi said.
But, he cautioned that such potential has to be assessed on medium-to-long term basis, since any objective or correct assessment cannot be done based on one or two investment, or for short term.
Chaturvedi was addressing a day-long symposium, organised by the Consulate General of India in Chicago, in partnership with Federation of Indian Chamber of Commerce and Industry, US India Business Council, and the Chicago Council on Global Affairs.
In his keynote address, Rajiv Lall, vice chairman and managing director of IDFC Ltd said the Indian infrastructure story is not about how much it has not been able to attain, but substantial achievements that have been accomplished so far, with specific examples of success.
Highlighting the enormous potential for Indo-US collaboration in this area, Indian Ambassador to the US Nirupama Rao said the present emphasis on public private partnership would lead to the share of private sector in total investment in infrastructure moving up from around 40 per cent in the 11th Five Year Plan to 50 per cent in the 12th Plan (2012-17).
A number of panelists articulated many remarkable success stories in India's infrastructure sector and showcased Indian firms' capability to create quality assets, manage and execute mega projects in timelines that may be set as new benchmarks.
Some constraints notwithstanding, the overall view was that the 'India Story', particularly that in the area of infrastructure, has so many positives which reflect the huge scope for working together for achieving 'win-win' outcome.
Of the challenges to overcome, funding constraints, land acquisition issues, delays related to identification & award of projects, regulatory uncertainties, and shortage of skilled manpower were pointed out as some of the major reasons causing delays in infrastructure development in India.
The infrastructure investment target of $1 trillion in the current Plan period is achievable, provided India could change the way to approach its development, participants said.
The change required is needed across all phases, including planning, bidding and execution of infrastructure projects.
More thorough and forward-looking project preparation and a sound land-acquisition process would be crucial in facilitating successful implementation of projects.
Similarly, the experts at the event suggested some more crucial steps for enhancing investor confidence: reducing uncertainty in the regulatory environment, effective dispute resolution, strong monitoring system, a sophisticated debt market and diversified set of financial instruments.