Indian Construction 2007 and Beyond . .
The period of 2007 and further is well expected to remain buoyant for India’s construction sector. Array of new infrastructure financing initiatives and new suitable project clearance and development mechanism would spur the growth. The surge would be dovetailed by the ongoing cordial approach taken by number of states for infrastructure development as well. An overview by NBM&CW’s editorial and research team.
As the beginning of the country’s 11thplan (April 2007—March 2012) draws to a close, the government is critically examining initiatives and options on financing the country’s burgeoning infrastructure requirements during the period, estimated to be $356 billion. The options are being examined to sustain the projected 9 percent GDP growth. There has been good rate of success on the options being examined and developed both at the recent past and present. This augurs well on the prospects of the country’s construction industry during the 11thplan period and beyond.
Important channels of financing infrastructure development by the government over the recent years have been through setting up of the Viability Gap Funding (VGF). The facility has been made to reduce capital cost of projects by credit enhancement and to make them viable for private investment through supplementary grant funding. Under VGF, 17 proposals have been cleared involving a cost of Rs. 3,970 crores. While 14 more proposals are in the pipeline. This apart, India Infrastructure Finance Company Limited (IIFCL) has been set up by the government to meet the long–term financing requirements of the potential investors.
