A high level committee has suggested a larger role for private sector in infrastructure sector. It has also recommended big reforms in power sector projecting an investment of 34 per cent of Gross Domestic Production, GDP. Talking to media persons in New Delhi today, chairman of the committee Mr Deepak Parekh said that he has estimated investment of more than 51 lakh crores rupees in infrastructure sector during the 12th five year plan. Out of this, private sector is expected to contribute about 47 per cent. He said in the 11th plan private sector's participation was 37 per cent.
The high-level committee on financing of infrastructure, which submitted its interim report to the Prime Minister Dr Manmohan Singh today, suggested the modernisation and efficient commercial operationalisation of Power distribution companies. It said this move will attract more private investment in the Power sector. In order to maintain flow of investment in the power sector, the report said, tariffs will have to be set at sustainable levels, while also improving the collection efficiency and reducing losses.The report further said that the increase in fuel cost should be passed on to the consumers to prevent piling up of losses of the power distribution companies.
While stressing the need for promoting Public Private Partnership (PPP) model of development for projects in sectors like rail,ports, airports and highways, the Committee suggested rationalisation of gas allocations and pricing policy within the next two months as further delay would impact the viability of gas-based power stations.
With regard to rail fares, the report called for rationalisation of the prevailing uneconomic rail fares, which have not been revised for a decade. It suggested greater involvement of private sector in rail projects and revamping of the Railway Board on commercial lines.
The panel also pitched for 100 per cent foreign direct investment (FDI) in the telecom sector. The limit at present is 74 per cent. The report said that average percentage of GDP in investment in infrastructure is expected to 9.14 per cent, which was 7.22 per cent during the 11th plan.
