“We have been able to sustain growth in the phase of global slowdown essentially on the strength of the infrastructure creation in India where the gap is huge,” said Mr Jaitley, who is in China to attend the annual meeting of the Board of Governors’ of Asian Infrastructure Investment Bank (AIIB).
“Over the next decade, we require over $1.5 trillion in India alone to fill up the infrastructure gap. We also use the additional resource which is available with us as a result of falling prices because that regime helps us.”
“In investing large public finance into infrastructure, for instance, we have seventeen hundred thousand villages in India. We intend to connect each of them by 2019,” he said while addressing a seminar on ‘Infrastructure and Global Economic Growth’ organised by China-sponsored Asia Infrastructure Investment Bank (AIIB) along with finance ministers of many countries.
He also spoke of the massive rural sanitation programme as part of the country’s current infrastructure programme.
“In terms of highway construction this year alone our target is 10,000 kms. Our railway system is over 100 years old. We are going in for a massive modernisation,” he said.
Mr Jaitley said the government is seeking private sector participation in converting railway stations into commercial hubs.
The government plans to build more airports, sea ports and generate more power, particularly renewable energy which is ecologically also better from all points view, he said.
“These are all the emphasis areas we have under taken,” he said.
About arranging funding for the massive development, he said, “We realise that starting point is public finances. It is only when the public finances are put into it, you start attracting and the activity begins a lot of private funds.”
At the same time there are large number of developmental institutions like World Bank, ADB which put in lot of money because infrastructure funding also brings in long time returns on a sustainable basis, Mr Jaitley said.
The government has set up the India Infrastructure Investment Fund where the government holds a minority stake, Mr Jaitley said.
“This a new experiment we have undertaken which we hope will be a success,” Mr Jaitley said, adding that the emphasis of the India in the next decade to fill up the infrastructure gap which will also generate growth, employment, pull up number people out of poverty.
“In our bid as emerging economy graduating into developed economy category, we feel that this is extremely vital for a country with a large population like India,” the Finance Minister said.
Besides Mr Jaitley and his Chinese counterpart Lou Jiwei, those who took part in the seminar were Pierre Egide Gramegna, Minister of Finance, Luxembourg, Imad Najib Fakhoury, Minister of Planning and International Cooperation, Jordan, Jin Liqun, AIIB President and Chris Heathcote, CEO, Global Infrastructure Hub, and Thomas Maier, Managing Director, EBRD and Chair of the WEF Global Agenda Council on Infrastructure.