IMF tells India to find alternatives to bank funding for core projects

NEW DELHI: IMF has urged India to move away from its predominantly bank-led funding for infrastructure projects and focus instead on financing from pension funds and insurance monies along with developing a bond market in the country.

India has a $1-trillion target for infrastructure investment over the next five years, of which half is expected to come from the private sector and the remaining from the government which is battling over 5% of fiscal deficit while private players have complained of a resource crunch because of a shortage of bank lending. Referring to this situation, Thomas J. Richardson, IMF’s Resident Representative in India, said it is necessary for India to draw examples from Chile and Korea which have alternate financial tools to assist infrastructure development.