News eDaily31 Oct 2017

India:Renewed call to channel insurance funds to infrastructure

31 Oct 2017

India would need to spend about INR50 trillion (US$771 billion) between 2018 and 2022 to build its infrastructure in a sustainable manner, rating agency Crisil said. A diversified financing ecosystem, including insurance companies, is needed to realise the various infrastructure projects.

“Spending of such magnitude requires expeditious resolution of the problem of stressed assets in banking, front-ending of bankable projects, comprehensive retooling of public-private partnership frameworks, and deepening of the infrastructure financing ecosystem, which is of tremendous importance,” said Ms Ashu Suyash, Managing Director & CEO, Crisil.

While the government has already taken some measures to address many of these issues, with the latest being the announcement of recapitalising capital-starved and bad loans-laden public sector banks, more could be done for strengthening and diversifying the financing ecosystem for infrastructure development, Crisil believes.

Mr Amitabh Kant, CEO of NITI Aayog (The National Institution for Transforming India,) advocates channelling insurance and pension funds into financing infrastructure projects.

The infrastructure sector has suffered in India due to under-investment for a long time, he said. “We need to build up an environment to tap pension and insurance funds for investments in infrastructure projects.”

 


 

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