Funding the Infrastructure Investment Gap

The fast growth of the economy in recent years has placed increasing stress on physical infrastructure such as electricity, railways, roads, ports, airports, irrigation, water supply and sanitation, all of which already suffer from substantial deficit in terms of capacities as well as efficiencies.

While Infrastructure development has always on the top agenda for India, considering the current global economic dynamics as well as domestic growth imperatives, it has emerged as one of the single largest imperative which could seriously compromise the economic growth trajectory.

Considering India’s growth and government focus on infrastructure development, all infrastructure sectors
including power, roads, railways, ports and airports are also scheduled for massive capacity expansion. There are opportunities for all the stakeholders like developers, financial institutions and suppliers in this process. India needs to double its infrastructure spending to ~10% of its GDP to achieve 9%+ GDP growth which further requires new funding sources.

The report gives an overview on our recent economic performance followed by an analysis of the Plan projections and provide an analysis of the likely sources of funding as well as some innovative funding options that need to be explored and developed. The emphasis on Public Private Partnerships or P3 and the capital and project development efficiencies that it could bring in cannot be undermined given the huge pressure on capital rationing and funding requirements. As a part of this Report, we also share our perspective on the topics selected for panel discussions – emerging financing options as well as key trends relevant for infrastructure companies.

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