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Friday, May 21, 2010

Govt eyeing $5-$11 bln funds for large projects

The government is considering to launch debt funds of $5 to $11 billion each to help build highways and other large infrastructure projects in addition to a similar fund announced last week, a top government official said on Friday.

The country aims to spend about $500 billion in the five years to end-March 2012, to overhaul rickety infrastructure that has been a drag on growth for Asia's third largest economy.

Brahm Dutt, secretary at the road transport ministry, said the consensus among policymakers was to have a series of funds to finance the ventures rather than go for one $150 billion to $200 billion fund.

"The feeling is we should have many more funds of small, small size," Dutt, who was a participant at the meeting last week that decided on the fund plan, told Reuters in an interview.

The Planning Commission, which charts out five-year plans for the economy, last week said India would set up an $11 billion infrastructure debt fund by year-end that will help refinance high-cost debt.

"One of the views that emerged at the meeting taken by the deputy chairman (of the planning commission) was that we should not have a very large size omnibus fund," Dutt said.

New Delhi is considering doubling the investment figure in the five years from 2012, and has effected policy changes meant to facilitate greater foreign and private equity participation in the infrastructure projects.

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