Indian finance minister Arun Jaitley, who will present his first full Budget this month, said that the government would soon come out with several new structures to fund projects. Responding to a question on how the government plans to finance infrastructure projects, Jaitley said that the government would, in addition to increasing public funding, also put in place a mechanism to convert domestic savings into long-term project finance.
A study by industry body PHDCCI and Crisil released last month said that India would need Rs 26,000 billion investments in infrastructure over the next five years to meet 7-8% growth targets. This amount is equal to 30% of total bank deposits in the country.
“We will now have to enter a new age where all models of financing infrastructure will have to be explored. A particular model can be created,” said Jaitley speaking through a video call at an event organized by Maharashtra government to discuss Mumbai's transformation into a global financial centre. “Last few weeks we had series of visitors who showed a great amount of interest in financing infrastructure,” the finance minister said but did not provide any details.
Speaking at the same event, minister of state for finance, Jayant Sinha, said, “We want to put India on a sustainable non-inflationary growth trajectory of 7-8% growth.” Adding that this level of growth was required to provide employment to young people who join the workforce every year, Sinha said, “I can assure you, there can be real innovations and breakthroughs there. As we move forward to this model of infrastructure financing, the important iconic projects for Mumbai whether it is trans harbour link or coastal road or the various metro lines, these infrastructure projects are going to be on the top of the desk.”