New Delhi: A high-level committee, headed by HDFC Chairman Deepak Parekh, has submitted its interim report to Prime Minister Manmohan Singh on reforms and suggestions on how to find the funding needed for the infrastructure sector, estimated at close to $1 trillion or over Rs 50 lakh crore during the current five-year plan for the economy.
The Parekh committee has recommended that the limit on Foreign Direct Investment or FDI in telecom sector be hiked from 74% to 100%. It suggests the government should raise rail fares and electricity rates.
The panel has also stressed the importance to address and correct concerns over General Anti-Avoidance Rules (GAAR), which would target companies and investors routing money through tax havens.The report asks for a correction of delays in land acquisition and environmental clearances, and the implementation of regulatory reforms "through an overarching legislation." It says that the inability to address these issues "will impact future and existing investments."
These recommendations are aimed at attracting Rs 51.46 lakh crore for funding infrastructure sector over the next three years. The government, the report says, should draw "a time- bound action plan ... with a view to improving the enabling environment for private investment which is expected to finance about 47 per cent of the projected investment during the 12th Plan". In the last five-year plan, the private sector contributed about 38% of the spend on infrastructure,
In July, the government picked Mr Parekh, who is the Chairman of Housing Development Finance Corporation, India's leading housing finance company, as the head of the high-level committee to review existing policies and suggest necessary changes in the investment framework for the high-priority infrastructure sector.
(with inputs from Agencies)