India needs to double the capital expenditure in the medium term from about 5-6 percent of the Gross Domestic Product (GDP) currently to fund infrastructure, DEA Secretary Ajay Seth said on Wednesday. Efforts, he added, have to be made to channelise all avenues of savings for garnering resources for stepping up investment in the infrastructure sector.
"The capex, both infrastructure and industrial capex is about 5-6 percent of the GDP size. We have to take it at least to double in the medium term, which requires all avenues to channelise savings and savings will come from based on the needs of each class of investors," Seth said at the CII Global Economic Policy Summit 2021.
Economic growth has to come from a virtuous cycle of private investment with the private sector having a larger and larger economic role, while the Government's role would be that of a facilitator, Seth said.
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He further said that the Indian capital market has to mature to enable investors to attract long term funds. "When it comes to long term financing, that is something our capital markets are yet to mature where we can attract long term investors from say the household sector to put that long term money. Because for infrastructure long term money is required," he said.
First Published: IST