According to India’s union finance minister Pranab Mukherjee, the Indian government might face a shortfall of $300 billion in funding requirements for the infrastructure sector during the 12th five year plan.
Mukherjee added that the financial institution in the country will have to make additional efforts to bridge the gap in funding for the sector.
“Availability of long-term resources to meet investment requirement in infrastructure is a key challenge. As per estimate, there may be a gap of 30 per cent in debt financing in 12th plan which is about $300 billion,” he said.
He was speaking at the launch of credit enhancement scheme of India Infrastructure Finance Company (IIFCL). The Indian government has planned to invest $1 trillion during the 12th plan period starting this year. The target is $500 billion more than the 11th Plan period.
He also added that is a need of new instruments for improving financing of infrastructure projects in the country in order to fill in the gap in funding for the sector. Inadequate infrastructure is seen as one of major challenges facing the Indian economy.
India Infrastructure Finance Co (IIFCL) entered into a partnership with Asian Development Bank launched the Credit Enhancement Scheme on Thursday. The scheme is aimed at boosting finances in infrastructure sector and making it easily available in this sector.
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