India won't meet $1 trillion infra investment target: Montek

Discussion in 'Economy & Infrastructure' started by Shaitan, Jul 17, 2012.

  1. Shaitan

    Shaitan Zandu balm all day Senior Member

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    New Delhi: Planning Commission on Monday said India will not be able to achieve $ 1 trillion target for investment in the infrastructure sector during the 12th Plan (2012-17) in view of lower economic growth prospects.
    "The earlier figure was based on the 9 per cent growth target and if the growth target is less, it (investment target) does not have to be same number," Planning Commission Commission Deputy Chairman Montek Singh Ahluwalia said when asked about trimming of the infrastructure investment target.
    "Obviously, if the five year perspective is lower than 9 per cent then investment requirement would also be lower. I don't think that $ 1 trillion should be seen as sacrosanct figure. I don't regard the $ 1 trillion figure as some kind of figure written in stone," he said.
    "The figure was given two years ago when the rupee-dollar exchange rate was Rs 44. So we are calculating, what is needed in rupee. So the dollar equivalent of that is bound to change," Ahluwalia said.

    The Commission had set the $ 1 trillion target with an assumption that the economy will grow at the rate of 9 per cent during the 12th Plan period.
    "The cumulative investment in infrastructure in the 12th Plan is targeted at around $ 1 trillion. Nearly half of this investment will be channelised into construction projects," the Commission had stated in its Approach to the Plan.
    The paper was approved by the country's apex decision making body National Development Council (NDC) last year.
    About the growth prospects, Ahluwalia said, "Given the situation around the world and our own domestic current growth prospects, I think achieving 9 per cent for five year average, is just not going to be feasible."
    The Commission was earlier eyeing annual average economic growth rate of 9 per cent during the 2012-17 period, which was also approved by the NDC last year.

    India won't meet $1 trillion infra investment target: Montek
     
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  3. ani82v

    ani82v Senior Member Senior Member

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    Assumptions that he was talking about were too optimistic. As eminent economists and planners (so called), weren't they supposed to factor in these scenarios.

    Its time they move over and let someone else do the job.
     
  4. Daredevil

    Daredevil On Vacation! Administrator

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    These worthies are just that "worthless worthies". These worthies are ready to take all credit when economy grows at 9% percent but are quick to blame global conditions when it grows at dismal 6%. I read some article where it is said that Indian economy grew at a healthy rate during 2005-2008 period because of high foreign exchange inflows and the economy is now sinking because of flight of foreign exchange. The contribution of these "worthless Worthies" is actually nothing because one cannot explain how these so called worthies gives us >8% growth for 5 years and then fail dismally in last two years.
     
  5. sob

    sob Moderator Moderator

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    DD, you are absolutely correct. This was a period when Governments in the US and Europe were doling out huge sums of money as economic stimulus. A large portion of the money came to our stock market. During this time the interest rates were low so the market boomed and also the corporates had a good time due to the stimulus in India and/or the slow down had not yet come to India.

    With the major economies going down along with the euro the pressure on Dollar ceased and the FIIs ran to safe heavens like the US $ away from emerging markets.

    Usually when there is a huge inflow of money in an economy the local currency appreciates relatively and the inflation increases due to the excess money floating around.But here we have a unique problem, money is flowing out, Rupee is gaining some lost ground and inflation continues to remain above the comfort zone of RBI.
     
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  6. p2prada

    p2prada Stars and Ambassadors Stars and Ambassadors

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    I wonder if the $500Billion target for the 11th plan was reached, then we can talk about reaching this target first before targeting anything remotely close to $1Trillion.
     
  7. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    If I am not mistaken, they were struggling at around 300b usd. Need it confirmed though.

    I stand corrected, 21 lakh crs should mean 465b usd (keeping rupee at 45 to a dollar, which is what it traded at between this time period).
     
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  8. sky

    sky Regular Member

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    Why not create a sovereign wealth fund that uses 20% of the India's foreign reserves for infrastructure project's , power generation,dam construction road building. The social and economic benefits will help all and belong's to the nation .
     
  9. sob

    sob Moderator Moderator

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    Because recent events have shown us that our Forex Reserve is not exactly healthy enough for use as Sovereign Wealth Fund. With the trade gap increasing day by day and the continued high price of Gold and Crude, we are not exactly in a very pretty state.

    Also we have had to use this reserve to prop up the INR and also do our bit on the international arena for the EU ( US $ 10 Billion odd)
     
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  10. afako

    afako Regular Member

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    That was because of the BJP's Reforms, The NHDP, The National Telecommunication Policy, FEMA 2003 replacing FERA, IRDA Act 1999, Competition Act 2002, Starting DEMAT Form of Shares in 2001, Electricity Act 2003 and many more such Laws leading to Privatization kicking out the Congress Socialist Era Laws which Truly Started the Modernization and Industrialization of India.

    Any Reform to show effects takes 2-3 Years. What BJP did in 1998-2004, There has not be a Major Reform from 2004-2012 by the Congress Thugs matching anything above to what BJP made.

    What followed was 2005- NREGA Spending $5 Billion Per Year to 2012 - $10 Billion in Socialist Schemes which Sucked Pure Cash from the Budget in Jacksh!t Socialism.

    $220 Billion Spent on Subsidies and Socialist Schemes from 2004-2012 by Congress.

    In Post-Lehman Period in September 2008 was a period of high Stimulus which allowed for growth and Congress saved its A*s in the Elections in April 2009.

    And you are looking Post 2008 - A downfall from 9.2% to 5.3%. What does this indicate?

    And 2 Years More to go with a FSB worth $20 Billion in Line waiting for April 2014!

    Our Stupid Public thinks it was some IT or BPO which was responsible for Growth in the last decade. It was not the Stupid IT, It is still the Manufacturing Factories which Pays the taxes and runs the Country.

    BJP set the Path of the country to a Manufacturing Economy but Congress deviated it to a Service Sustained Economy. You know Why!
     
  11. trackwhack

    trackwhack Tihar Jail Banned

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    Our forex is 15% of GDP. Not enough to do what you suggested. Even if we did, 20% of 300 billion is 60 billion. Enough for 100 GWE of thermal power. Thats nothing compared to our overall infra needs.
     

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