The ‘Trillion Dollar Dream' of investing in India's infrastructure sector can only be realised if key challenges are addressed at the pre-tendering, project execution, and financing stages, says a new McKinsey report.
The report, “Achieving the Trillion Dollar Dream”, prepared for the Federation of Indian Chambers of Commerce and Industry (FICCI), notes that strategic action at the pre-tendering stage, such as ensuring optimal allocation of resources and standardising contracts, can ensure that problems do not emerge at later stages.
The report comes in the backdrop of the 12th Plan approach paper, which aspires for planned infrastructure spending of around $1,000 billion-around 11 per cent of gross domestic product.
It points out that at the execution level, setting up clear processes to expedite land acquisition and fast track courts to settle disputes would ensure smooth work flow.
For easy flow of funds, banks should make infrastructure a priority sector. There is a need to create an active bond market, as also liberalise external commercial borrowing norms to provide additional sources of funding, the report adds.