The high-profile Investment Commission, headed by Ratan Tata, has said that India needs to attract investments of up to $550 billion in the next five years if it wants to become an economic powerhouse.
Tata had presented the report to Prime Minister Manmohan Singh last month. The prime minister has now asked nine central ministries, including petroleum, power, civil aviation, telecommunications, textiles, tourism and food processing, for inputs within a month on what they intend to do about this.
A government official told Business Standard that the ministries would have to suggest measures to overcome impediments like poor infrastructure and labour inflexibility among others. Once this exercise is over, the Prime Minister's Office will finalise the investment road map.
The commission has identified sectors like roads and highways, energy, civil aviation, textiles and garments, automobile components, real estate, construction, tourism and food processing as high priority areas.
In its report, the commission pointed out that the roads sector alone required investments of $30 billion by 2010. Given that road projects in the country are too small to attract big international players, the report has recommended that contracts be awarded on a build-own-transfer basis for projects of 300-500 km in length to attract international firms. The commission has also mooted the idea of private maintenance of highways.
Similarly, the report says that the power sector needs investments of $140 billion in five years to generate 90,000 Mw of electricity. At present, investment in this sector stands at $54 billion.
Highlighting the importance of the coal sector, the commission has said the sector needs investments of around $30-40 billion over the next decade to double production from 240 million tonnes at present.
Until now, the sector has attracted investments worth only $2.5 billion. The report also calls for major policy measures like doing away with Coal India's monopoly on mining and sales.
The telecommunications sector needs investments of around $22 billion by 2010. For this, the report calls for putting the 74 per cent foreign direct investment norm on the automatic route.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group
