Allow 100 percent FDI in telecom: Parekh panel
The committee on infrastructure financing Wednesday asked the government to allow 100 percent foreign direct investment (FDI) in telecom, privatise state-owned monopolies and raise electricity charges and rail fares.
In its report to Prime Minister Manmohan Singh, the panel asked the government to overhaul the regulatory framework in infrastructure, bring in clarity on taxation issues such as anti-tax avoidance rules, and expedite land acquisition and environmental clearance to attract investment in the infrastructure sector.
The committee, headed by HDFC chairman Deepak Parekh, projected an investment of Rs.51.46 lakh crore in the 12th Plan period (2012-17), pegging the private sector share at 47 percent.
"Business-as-usual approach is unlikely to deliver this level of investment," the panel said and asked the government to draw "a time-bound action plan" to improve the enabling environment for private investment.
The share of private sector in infrastructure funding was 37.53 per cent during the 11th Plan.
The panel called for increase in FDI in telecom to 100 percent from the current 74 percent and removing regulatory uncertainties related to allocation, pricing and sharing of the spectrum allotted in the past.
It suggested public-private partnership (PPP) initiatives for railways to mobilise private investment, including in modernisation of stations, elevated suburban corridors in Mumbai, development of new freight corridors, high speed rail projects and manufacturing of diesel and electric engines, coaches and wagons.
Here are the sector-specific suggestions made by the committee:
Telecom: Increase FDI to 100 percent, remove regulatory uncertainties related to allocation, pricing and sharing of the spectrum allotted in the past
Power: Rationalise tariffs, revise standard bid documents, allow import of coal through STC/MMTC or directly through power producers
Roads: Set up expressway authority, expedite institutional restructuring of NHAI
Railways: Rationalise passenger fares, encourage PPPs in various sectors of railways
Airports: Expedite award of green field airport in Navi Mumbai, Goa, Kannur and Chandigarh in current year
Ports: Expedite awarding of projects
Role of IIFCL: Guarantee operations to enable the flow of non-Bank long term credit for infra projects, especially insurance and pension funds.