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Infra finance shortfall in 12th Plan balloons
A Business Correspondent
Wednesday, August 25, 2010, 13:05 Hrs  [IST]

Union Finance Minister Pranab Mukherjee has said that India's aim of investing Rs.41,00,000 crore on the infrastructure sector in the 12th Plan (2012-17) would most likely face a shortfall of 30 per cent or Rs.12,30,000 crore.

"The main constraint in the funding for infrastructure is the mismatch of asset-liability by the banks and the risks concerning their concentration. This is all the more problematic because India gets support from banks which finance its infrastructure projects," Mukherjee.

The FM was addressing members at a meeting of the Parliamentary Consultative Committee attached to his ministry on infrastructure financing.

A robust corporate bond market is required to bridge the financial gap by aiding the banks in addressing their asset-liability mismatches with regulatory changes to bring in more foreign capital, most importantly, debt capital.

 The corporate bond market has to be strengthened so that credits can be enhanced for funding the infrastructure projects, and also access to long-term funds from insurance and pension funds. For the first two years of the 11th Plan period, the target investment was Rs.9,81,119 crore while the actual investment was Rs.10,65,828 crore, he said.
 
                 
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