Bangalore: India is set for a flood of investment in highways, ports, airports and power plants as foreign funds tap opportunities in its deficient public works, Ernst and Young says in a report.
“We expect private investments in infrastructure projects in India to cross the four trillion rupee ($101 billion dollar) mark in the next five years,” said Kuljit Singh, partner at the Indian unit of the consultancy.
“Infrastructure is key to growth in emerging markets around the globe and private investors are eager to support it,” Singh said in a statement accompanying the report received on 6 November.
India’s investment in roads, railroads, water utilities, energy, ports and airports is expected to equal 9% of national economic output by 2012, up from 5% now, said Ernst and Young.
The lack of a “master plan” for the development of public works has limited the country’s ability to attract investment in infrastructure to keep pace with economic growth, now running at a yearly 9%, it said.
The shabby infrastructure is seen by economists as the main impediment to maintaining and accelerating the pace of economic growth in a nation of 1.1 billion people and closing the gap with neighbouring giant China.
Power outages are common, water supply rationed in the cities, loading and unloading of freight at the ports is woefully slow and planes have to often circle airports for an hour to await landing slots.
In Bangalore, India’s computer-software capital, it can take two hours for programmers to be bussed down through pot-holed roads and chaotic traffic to the immaculate campuses of companies such as Infosys, Wipro and Mindtree.
India, its government’s budget already overstretched, has been courting foreign and domestic private investment in infrastructure that has been slow in coming, as investors chased quick returns in sectors such as consumer goods and retail.