| According to investment banking company Goldman Sachs, India's infrastructure sector will require US$ 1.7 trillion investment in the next 10-years. With a view to streamlining and simplifying the appraisal and approval process for public private partnership (PPP) projects, a Public Private Partnership Appraisal Committee (PPPAC) has been constituted under the chairmanship of Secretary, Department of Economic Affairs and Secretaries of Planning Commission, Department of Expenditure, Department of Legal Affairs and the concerned Administrative Department as its members. The project proposals are appraised by the Planning Commission and approved by the PPPAC. Until December 2009, the PPPAC had approved 144 projects involving an investment of Rs. 1,30,915 crore. |
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| The cement industry has despatched 199.98 million tonnes of building material in 2009-10—an increase of 10.48 per cent over the 181.01 million tonnes despatched in the preceding fiscal—on the back of buoyant demand from the infrastructure space and individual home builders in rural and semi-urban regions. |
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| SECTOR FACTS |
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| India has... |
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12 Major Ports |
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Fifth largest electricity generation capacity in the world |
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454 airports and airstrips in India |
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Largest rail network in Asia |
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| Investment Opportunities |
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| The private sector is increasingly playing a major role in investment in infrastructure. The government has allowed India Infrastructure Finance Company Ltd (IIFCL) to use approximately one-third of its Rs 10,000-crore (US$ 2.2 billion) refinancing facility for direct lending to infrastructure projects, which would provide more resources for public-private partnership projects in roads, power, airports and ports. The Reserve Bank of India (RBI) has classified infrastructure finance companies (IFC) in the category of non-banking finance company (NBFC) with a capital adequacy ratio requirement of 15 per cent. |
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| Investment Policy Updates |
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FDI up to 100 per cent under the automatic route is permitted in exploration activities of oil and natural gas fields, infrastructure related to marketing of petroleum products, actual trading and marketing of petroleum products, petroleum product pipelines, natural gas/LNG pipelines, market study and formulation and Petroleum refining in the private sector. This will be subject to the existing sectoral policy and regulatory framework in the oil marketing sector and the policy of the Government on private participation in exploration of oil and the discovered fields of national oil companies |
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FDI up to 49 per cent is permitted under the Government route in petroleum refining by the Public Sector Undertakings (PSU). This should not involve any divestment or dilution of domestic equity in the existing PSUs |
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FDI up to 100 per cent under the automatic route is allowed both in setting up new and in established industrial parks |
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| Source: Consolidated FDI Policy, Department of Industrial Policy & Promotion (DIPP) |
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 We are positive on the infrastructure sector now that capital formation activities have resumed after a brief lull. |
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Nilesh Shah
Deputy MD & CIO,
ICICI Prudential Asset Management |
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| WHAT'S NEW |
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| Seven new industrial estates would be established in the state of Karnataka under public-private partnership model, according to Mr V P Baligar, Principal Secretary, Industries and Commerce, Karnataka |
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| Industrial Finance Corporation of India (IFCI) plans to invest US$ 225 million to set up a base in the proposed global financial district near Devanahalli |
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| Kerala has invited request for proposals (RFP) for its Infopark II development |
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