Das to CII: “dare you to dream”
A big push to certain targeted mega infrastructure projects, in the case of the golden quadrilateral, can reignite the economy, said the Reserve Bank of India (RBI) Governor Shaktikanta Das.
“This could begin in the form of a north-south and east-west expressway together with high-speed rail corridors, both of which would generate large forward and backward linkages for several other sectors of the economy and regions around the rail/road networks,” he said on 27 July 2020.
“Both public and private investment would be key to financing our infrastructure investments,” he told members of the National Council of the Confederation of Indian Industry (CII).
CII can play a creative role in financing infrastructure investments, he said at the meeting on “2020-21 – Building India for New World: Lives, Livelihood, Growth”.
Moving away from the morbidity of the pandemic to one of optimism, Das said, “These dynamic shifts in our economy need to be converted into structural transformations which yield sizable benefits for our economy and help to position India as a leader in the league of nations.
The Indian industry will have a pivotal role in what could be a silent revolution, the RBI Governor pointed out.
“Can the CII be its spearhead? I leave you with these ideas and dare you to dream.”
Notwithstanding this progress, the infrastructure gap remains large, he regretted.
According to estimates of NITI Aayog, India would need around US$4.5 trillion for investment in infrastructure by 2030, he noted.
“On financing options for infrastructure, we are just recovering from the consequences of excessive exposure of banks to infrastructure projects.”
Non-performing assets (NPAs) relating to infrastructure lending by banks has remained at elevated levels. There is clearly a need for diversifying financing options.
The setting up of the National Investment and Infrastructure Fund (NIIF) in 2015 is a major strategic policy response in this direction, he acknowledged.
But the promotion of the corporate bond market, securitisation to enhance market-based solutions to the problem of stressed assets, and appropriate pricing and collection of user charges should continue to receive priority in policy attention, Das told CII National Council in Mumbai. @RBI #CII #infrastructure #projects #tenders #financing #economy #banks# /fiinews.com
