India needs `50tr investment: Crisil
New Delhi, Oct. 26: The infra spending in the country is required to be enhanced to `50 lakh crore over the next five years and power, transport and urban sectors are expected to corner over threefourths of such investments, according to a report.
It also said that infra investment in India is estimated to have risen to `37 lakh crore, between fiscals 2013 and 2017, marking a 56 per cent growth over the `24 lakh crore spent in the preceding five years. “Crisil believes spending on infrastructure needs to increase to `50 lakh crore over the next five fiscals through 2022.
“This projection factors an average annual GDP growth of 7 per cent, infrastructure investments equal to 5.5 per cent of GDP, and a pick-up in private sector investments after fiscal 2019,” Crisil said.
It further predicted that power, transport and urban sectors will account for 78 per cent of the overall infrastructure spending.
The report pointed out that in fiscals 2016 and 2017, higher central government spending partially offset a steep decline in private investments and deterioration in state government finances.
It said weak project preparation, poorly structured contracts with inappropriate risk allocation, irrational bidding exuberance, and over-reliance on bank-led financing in the past have spawned the ‘twin balance-sheet problem’ of deeply indebted developers and gargantuan stressed assets in banking.
— PTI