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Do it yourself – infrastructure in India

Infrastructure_india_2Dismayed by the state of affairs, India's private sector takes matters in its own hands. Result: a record $500 billion investment in infrastructure projects will take place over the next three years.

Sounds expensive? K.V. Kamath, chief executive of ICICI Bank, explains that with an average profitability of 25 percent over the last years, many corporations will be able to fund almost 70 percent of projects with internal cash.

Comments

Submitted by vallabh on
Chris, Between the time you wrote this post and now, the infra scene in India has undergone a drastic, and welcome, change. Now, all state governments and the GoI are talking about P3 (public-private partnerships). Given the dismal budget deficits, it would be wishful thinking to expect the government alone to provide for all infrastructure to the citizens. There also is a compelling argument in favour of the private sector: they deploy cash better than the government. With the latter, only 10% reaches the actual beneficiaries, for every dime spent. In the current economic scenario, the government is also planning several boosts to investments in infra, such as longer tolling periods for road projects. Regardless of who the investor is, infra projects also generate jobs, besides giving a general boost to the economy. That is the current thinking even by the UK government.

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