India needs $10 billion funds for road projects
India requires over $10 billion (INR 700 billion) investments to complete ambitious road projects across the country to boost economic growth. The Union Ministry for Transportation is exploring options of tapping overseas markets for raising funds. Indian government is aiming at INR 5 trillion ($14.7 billion) for road projects over next three years.
India, a part of BRICs (Brazil, Russia, India, China and South Africa), has allocated 50 percent more in budgetary allocations for transport and logistics sector. Prime Minister Narendra Modi is keen on speeding up projects in construction, highways, railways and other infrastructure segments.
Nitin Gadkari, Union Minister for Transportation, is pushing for more fund raising including tapping overseas markets. Gadkari said: "While interest rates may be attractive, the challenge is to find solutions for foreign exchange hedging costs."
Indian currency Rupee against the US dollar dropped about 10 percent in the past 12 months. The weaker Indian rupee requires hedging mechanism in exploring foreign loans, according to NDTV. Gadkari feels there's need of fast decision making for ensuring the completion of infrastructure projects in time.
Meanwhile, Indian government has set a deadline at 15 February to bring back stalled road projects on track. The estimated value of stalled projects would be INR 30,000 crore ($3.5billion). The Transport Ministry has been holding meetings with bankers and developers to resolve the issues.
Gadkari said: "We have set a deadline of 15 days to solve all issues of stuck 14 highway projects worth about INR30,000 crore." The projects hit roadblocks owing to several problems including land acquisition, forest and environment clearences, as reported by The Economic Times. When Modi assumed office, there were 384 highway projects stuck in progress.
India needs massive investments to the tune of $1trillion (INR 67trillion) for developing highways, ports and airports. Gadkari said: "Upgrading infrastructure is a major challenge for policy makers of the Asia's third largest economy. India needs $1 trillion for new roads, ports, airports over next few years."
Gadkari says there's no problem in fund raising, but unfortunately demoralized bureaucracy is the hurdle. The Transport Ministry is confident in removing bureaucratic hurdles on the way of road projects, according to DNA. The Ministry is working on a target of laying 30kilometers of new roads per day by 31 March 2016 as against the ambitious target of 100km per day.
Gadkari said: "Our efforts led to rolling out of majority of the 384 projects while we had to terminate 41 schemes. Of the remaining 21 languishing projects, issues have been solved for seven while we are confident to resolve issues with remaining 14 within a fortnight."
Finance Minister Arun Jaitley will present Union Budget-2016 this month. Gadkari in NDTV interview said: "The policy of our government is giving more priority for development of infrastructure. There is no problem of investments, no problem of money. We only need to fast track our decision-making process."
India's gross domestic product (GDP) is growing at about seven percent annually. If infrastructure is developed, it'll push GDP growth two percent extra and generate five million jobs, said Gadkari. India's infrastructure is ranked below that of Indonesia and China.