New Delhi: India needs to attract investments worth a whopping USD 4.7 trillion for the country's economy to grow at an average 7 per cent rate over the next 5 years, nearly double the sum invested in the previous such period, according to a study by CII. The study also suggested that monetary, fiscal, trade and other relevant policies could be realigned to help the economy mobilise the required investments.
"The CII has estimated the figure at Rs 280 lakh crore (USD 4.7 trillion), which is nearly double the value of Rs 139 lakh crore (USD 2.9 trillion) that was invested in the last 5 years," the industry body said. Besides, it has projected an average growth of 6.3 per cent for the industrial sector over the next 5 years, up from 5.2 per cent in previous corresponding period, for which a cumulative investment of Rs 146 lakh crore is required.
Of this, Rs 98 lakh crore is to be invested in manufacturing alone, which is understandable from the fact that the sector needs to accelerate its growth and create mass employment to absorb the rapidly growing population of job seekers. The study estimates the services sector to grow at an average of nearly 8 per cent per annum, roughly the same as in the previous 5-year period and it requires an investment of Rs 98 lakh crore.
"If manufacturing sector is able to meet the desired investment target, it should automatically lead to greater attractiveness of services sector. There is also a vast unexploited potential in areas such as health, education, trade, financial services and tourism, where appropriate policy interventions can make a big difference," CII Director General Chandrajit Banerjee said.
Moreover, agriculture sector, which continues to be heavily dependent on rain for irrigation and has recorded abysmally low productivity when benchmarked against international standards, is desired to expand by an average growth of 4 per cent per annum over the next 5 years, requiring a total investment of Rs 36 lakh crore. The industry body expects infrastructure investment to go up from around Rs 24 lakh crore (USD 500 billion) in XI plan period to Rs 64.3 lakh crore (USD 1071 billion) during 2014-15 to 2018-19 period, in line with the Planning Commission's estimate of around USD 1 trillion during the 12th Plan period.
The study suggests that around 40 per cent of the total investment in infrastructure should come from private sector, which is lower than 48 per cent prescribed by the Planning Commission for the 12th Plan period. "The private sector continues to face multifarious challenges in infrastructure and even PPP has failed to produce desired results, making the task of raising nearly half of investment from private sector, as envisaged in the 12th Plan, quite difficult in the present milieu," Banerjee said.
