With India's roads, airport and port sectors requiring a whopping Rs 2,60,000 crore (Rs 2600 billion) investment in the next six years, the government should frame conducive policies for the infrastructure sector, whose growth dipped to 4.5 per cent from 6.4 per cent last year, the Economic Survey said on Monday.
Saying that India's growth prospects are intricately intertwined with the rapid development of physical infrastructure, the Economic Survey 2005-06 suggested that speedy provision of quality infrastructure through appropriate policy stimulus constitutes the first and foremost component of this challenge.
The Prime Minister's committee on Infrastructure has estimated that the nation would require investment to the tune of Rs 2,62,000 crore (Rs 2620 billion) by 2012.
Of the total amount, investment in national highways was envisaged to be Rs 1,72,000 crore (Rs 1720 billion), Rs 40,000 crore (Rs 400 billion) for airports and Rs 50,000 crore (Rs 500 billion) for development of ports.
"A substantial share of this investment is expected to come from the private sector. It has been estimated that India has the potential to absorb $150 billion of FDI in the next five years in the infrastructure alone," according to the Survey. "There is a potential for public private partnership to contribute to help more and bridge the infrastructure gap in India," the Survey pointed out.
The suggestion by various empirical studies that given its institutional strengths, India's per capita income should be four to five times of what it is now, portends a bright outlook for growth over the medium term, according to the Survey.