Highly capital intensive projects need the PPP model, says the Finance Minister
Higher investment in infrastructure sector is a powerful countercyclical measure to fight economic slowdown in the South Asian countries. Infrastructure development can enhance the economic capacity of the region, boost internal demand and strengthen intra-regional trade and commerce, remarked Mr. Pranab Mukherjee, Union Minister of Finance, Government of India.
He was inaugurating the "South Asia Conclave on Enabling Regulation for Investment in Infrastructure" in New Delhi yesterday along with Mr. Sushilkumar Shinde, Hon'ble Union Minister of Power.
Removing infrastructure gaps in the region is essential for building a sub-regional framework, which will provide a seamless market, facilitate effective exploitation of synergies, and generate billions of dollars of new output, thus making South Asia the new powerhouse of global economic activity, Mr. Mukherjee added.
He also emphasized on the need to undertake Public-Private Partnership (PPP) approach in infrastructure development, as such projects are highly capital intensive and public funds alone can not meet entire requirement.
Mr. Sushil Kumar Shinde, Union Minister of Power, GOI, in his address emphasized that rapid investment in infrastructure sector in South Asian countries is pre-requisite for region's socio-economic development. Suitable regulatory regime is crucial to the development of infrastructure.
Mr. Shinde, while referring to Indian energy sector, mentioned that the cost plus approach would be adhered to only certain limited cases of natural monopoly such as gas-supply and electricity transmission sector. In other sectors, market based competition would be promoted.
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