Govt must use forex for infrastructure financing

India is on the verge of witnessing a sustained investment phase in infrastructure buildup. With a slew of announcements in housing, road, port and airport development, we are seemingly on a path of sustained higher economic growth on the back of improvement in infrastructure construction in the country.

The government, in its mid-term appraisal of the tenth five-year plan, has revised upwards its infrastructure investment target from Rs 10,890 bn to around 11,100 bn (US$ 250 bn) over the next five years. From a policy perspective, there has been a growing consensus that a private-public partnership is required to remove difficulties concerning the development of infrastructure in the country. A substantial chunk of the abovementioned investment target is likely to come from the private sector.