A high-level committee, headed by HDFC Chairman Deepak Parekh, has submitted its interim report to Prime Minister Manmohan Singh on reforms and suggestions on how to find the funding needed for the infrastructure sector, the requirement of which has been estimated at close to $1 trillion, or a little over Rs 52 lakh crore, during the 12th Plan period (2012-17).
The Parekh committee has recommended that the limit on Foreign Direct Investment, or FDI, in telecom sector be hiked from 74% to 100%.
The panel has also stressed the importance to address and correct concerns over General Anti-Avoidance Rules (GAAR), which would target companies and investors routing money through tax havens. Besides, the report has called for the need to resolve delays in land acquisition and environmental clearances, and implementation of regulatory reforms through an overarching legislation. It says that the inability to address these issues will impact future and existing investments.
Policies related to telecom space with regard to allocation, pricing and sharing of spectrum be resolved soon, the report further adds.
These recommendations are aimed at attracting Rs 51.46 lakh crore for funding infrastructure sector during the 12th Five Year Plan (2012-17), says the report. The government, the report says, should draw "a time- bound action plan ... with a view to improving the enabling environment for private investment which is expected to finance about 47 per cent of the projected investment during the 12th Plan".
In July, the government picked Mr Parekh, who is the chairman of HDFC, as the head of the high-level committee to review existing policies and suggest necessary changes in the investment framework for the high-priority infrastructure sector.
The committee was originally set up in November 2010 under the chairmanship of former RBI Deputy Governor Rakesh Mohan.
The other members of this committee include R Gopalan (former Secretary, Department of Economic Affairs), D K Mittal (Secretary, Department of Financial Services), IRDA Chairman J Hari Narayan, PFRDA Chairman Yogesh Agarwal, RBI Deputy Governor Subir Gokarn, SBI Chairman Pratip Chaudhuri and LIC Chairman D K Mehrotra.
(With inputs from PTI)