India government taps SBI for $11bln infrastructure fund

Government enforces measures on improving nation’s infrastructure after ranking 89th in Global Competitiveness Index.

India is in talks with the nation’s largest bank over an $11 billion fund as Asia’s third-biggest economy seeks to raise finances to build roads, ports and power plants, an aide to the prime minister said.

The government is holding discussions with the State Bank of India and “a couple of other players” for a debt fund that would buy bonds sold by infrastructure companies, Montek Singh Ahluwalia, 66, said in an interview in Kuala Lumpur on Tuesday. The State Bank may act as an anchor investor along with one or two local or foreign funds, he said.

“We should be able to have an infrastructure debt fund announced somewhere in the beginning of next year,” said Ahluwalia, who is the deputy chairman of the nation’s Planning Commission. “It will require certain regulatory relaxations and they are working out what those would be.”

The effort is part of India’s plan to propel economic growth to a sustained average annual rate of 10 percent, from the 8.5 percent pace forecast for this year. Ranked below Ivory Coast for the quality of its public facilities, the nation will need an estimated $1 trillion in infrastructure in the five years to March 2017 to reach such an expansion rate.

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