Spending on infrastructure needs to be raised to at least 10% of GDP within the next few years, if India has to sustain an economic growth rate of 9%, said Pradeep Singh, MD, IDFC Projects in a presentation to the Annual Meeting of the Asian Development Bank held at Manila recently.  IDFC Projects is a wing of Infrastructure Development Finance Co Ltd.

India’s GDP was $1.4 trillion at the end of March 2011. Currently, investment in infrastructure stands at 8% of this, he said, adding that it lagged behind China’s spend of 9%.

Singh also pointed out that though there has been impressive growth in the sector in the last five years, India’s basic infrastructure ranked 86th in World Economic Forum’s Global Competitive Report-2010.

During the just concluded 11^th Five Year Plan, spending on infrastructure was $ 425 bn, but this actually fell short of the $ 500 bn that had been set as the target. Singh said that the 12^th Plan (2012-2017) was targeting an expenditure of $ 1 trillion on infrastructure development in the next five years.

Since the domestic private sector is expected to spend about $ 500 bn during this period, with $ 350 bn in debt and $ 150 bn in equity, it was important for the country to attract overseas investments, he concluded.