Hatching foreign exchange reserves

The Government of India is considering a proposal to use its huge foreign exchange reserves, which stands at a staggering $170 billion to fund the infrastructure sector. This idea was originally was mooted by Montek Singh Ahluwalia, Deputy Chairman of planning Commission. However, the idea could not see the light of the day due to reservations from several quarters. However, given the huge requirement of around $320 billion during the next five years of the 11th Plan for the infrastructure, the government is now considering using these forex reserves to fund infrastructure projects.

At present, infrastructure investments constitute 5% of the GDP. This needs to be increased to 8%. Over $200 million would be required to be met from public kitty over the next five years, while an estimated $77 billion would have to come from the private sector.