Pension, insurance funds can finance infrastructure: Amitabh Kant
ET Bureau|
Updated: Oct 27, 2017, 12.55 AM IST
NEW DELHI: Niti Aayog CEO Amitabh Kant has pitched for channelling insurance and pension funds for financing infrastructure projects and also for a complete re-examination of the viability gap funding (VGF) scheme.
The infrastructure sector has suffered in India due to under-investment for a long time, he said. “We need to build up environment to tap pension and insurance funds for investments in infrastructure projects. VGF scheme needs a complete re-examination,” Kant said at Crisil India Infrastructure Conclave on Thursday.
VGF is one-time grant by the government to public-private-partnerships (PPPs) in the infrastructure sector to fill the funding gap to make projects commercially viable. Kant said in the last three years, the government has put in a lot of resources in building infrastructure like roads and airports, almost making up for the lack of private sector investment in such projects.
“You can do it for short run but not for long run. The challenge is to bring private sector investments back in the infrastructure sector,” he noted. Kant also stressed that India needs strong bids and concession evaluation mechanism of PPP infrastructure projects.
“If you do a well-structured infrastructure project, then definitely you will get response from private sector players,” Kant said. He also said if India wants to grow at 9-10% then it must develop its infrastructure.
The infrastructure sector has suffered in India due to under-investment for a long time, he said. “We need to build up environment to tap pension and insurance funds for investments in infrastructure projects. VGF scheme needs a complete re-examination,” Kant said at Crisil India Infrastructure Conclave on Thursday.
VGF is one-time grant by the government to public-private-partnerships (PPPs) in the infrastructure sector to fill the funding gap to make projects commercially viable. Kant said in the last three years, the government has put in a lot of resources in building infrastructure like roads and airports, almost making up for the lack of private sector investment in such projects.
“You can do it for short run but not for long run. The challenge is to bring private sector investments back in the infrastructure sector,” he noted. Kant also stressed that India needs strong bids and concession evaluation mechanism of PPP infrastructure projects.
“If you do a well-structured infrastructure project, then definitely you will get response from private sector players,” Kant said. He also said if India wants to grow at 9-10% then it must develop its infrastructure.
