Government plans to attract FDI in infrastructure sector to address liquidity crunch

The Road Transport, Highways, and MSME Minister, Nitin Gadkari on July 28 announced that the central government has been making efforts to attract Foreign Direct Investment (FDI) in the infrastructure sector in order to address the liquidity crunch as COVID-19-hit economy.

The Union minister also informed that the talks have also been going on with various insurance funds, pension funds, and financial institutions. He added that the infrastructure is the most economically viable industry and the internal rate of return of projects is very good.

Mr. Gadkari made an announcement while addressing a webinar on Road Development in India and also urged the private players to join hands with the central government as the economy is passing through a critical phase and requires liquidity.

Bringing FDI in infrastructure sector:

While discussing the plan, the union minister mentioned that the COVID-19 crisis must be turned into an opportunity as the world has been recognising India as a good place for investment. He added that the government has been taking a policy decision to offer projects only after 90% land acquisition and regulatory clearances like environment and forest.

Nitin Gadkari informed that in infrastructure, the government has been trying ways as to how we can attract maximum investment in the sector. Today huge opportunities can be seen in power, highway, transport, communication, water, and other sectors as job creation were not possible without propelling infrastructure.

The union minister also stressed the need in bringing down the logistics cost and mentioned that there is a huge potential in alternative fuel and electricity.

The government has also been promoting LNG for long-distance vehicles like buses and trucks which will be much cheaper as compares to the diesel vehicle.

Other projects by the government:

•  An electric highway project is one of the plans on the upcoming Delhi-Mumbai expressway project.

•  The government has been encouraging projects on a hybrid annuity, engineering, procurement and construction (EPC) and other modes as the present condition of the Indian contractors has not been comfortable for BOT (build, operate and transfer) projects.

•  The central government has also identified a list of 15-20 projects totalling 3000 km on BOT and will observe the response on the basis of one or two projects.

•  There is also a target of building highways worth Rs. 15 lakh crores in the time period of two years.