Planning Commission has submitted a proposal to the finance ministry for raising Rs 70,000 crore (Rs 700 billion) for the infrastructure projects in the country in the next three years by using the burgeoning foreign exchange reserves.
"We can raise up to Rs 23,000-24,000 crore (Rs 230-240 billion) every year for the next three years," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters at an interactive meeting organised by All India Industries Association in Mumbai.
The use of foreign exchange reserves for infrastructure projects would put more money in the economy, but would also lead to an increase in fiscal deficit, he said.
However, this increase in fiscal deficit could be neutralised by allowing more imports, he added.
The proposal to this effect is being discussed with the finance ministry, he said, but did not give any timeframe for its implementation.
The funds generated would be used broadly in the areas of high infrastructure projects including roads and irrigation, he said.
Singh said the planning commission is working on the share of the Centre, states and private players for the expected Rs 9,00,000 crore (Rs 9000 billion) investment needed in the power sector and would come out with a proposal in the mid-term Pplan appraisal by December end.
To a query as to whether the Planning Commission had become a redundant body, Singh said the Commission is a principal body "for allocation of funds for development and criticising the government policies and projects."
"In the last 15 years, there has been more expertise outside the government," he observed.
Ahluwalia said there is a need to emphasise on social sector, agriculture, which is facing serious deceleration, and for a strategy to give larger role to the private sector.
