Quicker regulatory nods can put infra in fast lane

The infrastructure industry in India will require an investment of $270 billion every year at a time when barely half of what’s needed is being put into the sector, said Kenichi Yokoyama, country director of Asian Development Bank.

India needs to address regulatory issues for the sector to gather pace and approvals around land acquisition and project clearances need to be done faster, industry experts said while taking stock of the investment opportunity in India’s infrastructure sector at the Global Business Summit held in Delhi on Saturday.

The insolvency and bankruptcy code has set an example for corporates to follow and companies will be more prudent in making due diligence before bidding for projects, said PR Jaishankar, CEO of IIFCL.


Public private partnership (PPP), which has been the mode of operation in the infrastructure sector in India, has taken off in the roads sector while majority of the risk is borne by the private sector and regulatory approvals are taking time, said BVJK Sharma, CEO, JSW Infrastructure. “PPP is the way forward. If you see the funding requirement, what the private sector can do is limited. There are issues like need for faster dispute resolution, contract approvals,” said Yokoyama. For foreign direct investment (FDI) to come into the infrastructure sector, the country must also look at investing in commonwealth nations, said Alan Gemmell, chief executive, Commonwealth Enterprise and Investment Council. “There is incredible opportunity to invest in infrastructure in India. India should also look at investing in commonwealth countries, which will make doing business easier,” Gemmell said. The infrastructure sector needs to look beyond banks as mode of financing, experts maintained. “Banks were not reckless in the past about lending to infrastructure companies. They were not fit to lend to the infrastructure sector, but they were the only source of lending,” Jaishankar of IIFCL said.