US turmoil won't hit core sector investment

NEW DELHI: The financial meltdown on the Wall Street and rising interest rates will not affect at least one sector, thanks to its long gestation period. Crisil, the research and credit rating agency, has estimated that a substantial investment will flow in the Indian infrastructure, despite the financial crisis gripping the world.

Estimates suggest, eight sectors, like oil and gas, power, roads, ports, airports, railways , urban infrastructure and telecom, are expected to draw more than Rs 16 lakh crore investment in India between 2007-08 and 2011-12 .
Crisil study shows that during this period, growth in power sector will be 60%, while roads will expand 100%, airports 400%, ports 160% and Railways at 250%.

A consultation paper prepared by the Planning Commission also says that a $500 billion investment during 2007-11 is required in infrastructure to sustain India���s high growth rates.

The projected sector-wise shares are: 30.4% in electricity, 15.4% in roads and bridges, 13.7% in telecom and 12.4% in Railways , among others. And, 30% of the total investment is expected to come from the private sector (including public private partnership) DK Joshi, director and principal advisor, Crisil, said that tight liquidity situation might create a short-term crunch for the core sector, but in the medium term there would be no impact.

Sachin Mathur, Research Head, Crisil, said, ���There are three key reasons for being confident about investment in Indian infrastructure ��� improved institutional framework for investments , especially by the private sector; experience gained by government, regulators and players regarding the process of participation and improved project execution and financial capabilities of players.