'India needs $475b fund to upgrade infrastructure'

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NEW DELHI, Aug 19 (PTI): India will need an investment of USD 475 billion during the 11th plan ending 2012 to upgrade infrastructure so as to sustain an economic growth of nine per cent every year, Finance Minister P Chidambaram said.
"The challenge of infrastructure is huge, the committee on infrastructure has revised funds required for infrastructure during 11th plan from USD 320 billion to USD 384 billion at 2005-06 prices, which means USD 475 billion at current prices," he said.
The bottlenecks in infrastructure were pulling down GDP growth by one to two per cent every year, he said last night, addressing the 43rd batch of Foreign Service Institute. The participants included diplomats from Sri Lanka, Bhutan, South Korea, Mozambique, Turkmenistan, Lesotho and Turkmenistan.
However, he said, with increase in domestic savings, investment and inflow of capital from other countries, the government was confident of achieving the target.
The rate of domestic savings and investment was likely to go up by at least 1.3 per cent to cross 35 per cent mark. Savings as percentage of total GDP was 32.4 per cent and investment 33.8 per cent in 2005-06, he said.
He said with a sustained GDP growth of around nine percent, India would eradicate poverty in 20 years and emerge as the world's third largest economy.
Chidambaram said he was concerned about the farm sector, which had seen stagnation in production and the area under foodgrain cultivation between 1998 and 2007.