Meeting the Financing Challenge in the Energy Sector in India

India’s infrastructure spending for the 12th five year plan period is estimated by the Planning Commission to be of the order of Rs.56.3 trillion (roughly USD 1.05 trillion). This is effectively double the investments achieved over the eleventh five year plan period (2007-12) in Infrastructure sector.

The investment by private sector in infrastructure needs to rise from 38% in the eleventh five year plan period to about 50% for the overall target of investments to be realized over the twelfth five year plan period. This gradual shift away from public financing of infrastructure is in line with the Government’s strategy to focus scarce public resources on social sectors of the economy. The study highlights the large investment requirements and the increasing role of the private sector as both translate to several challenges in financing.