Download now: King Coal Triple Play

India's $1 Trillion Plan

Indian Prime Minister Pushes for New Infrastructure

Written by Brianna Panzica
Posted June 12, 2012

Last Wednesday, Indian Prime Minister Manmohan Singh addressed a committee of national ministers and secretaries to discuss an enormous infrastructure plan designed to speed up the growth of the national economy.

Prime Minister Singh invited secretaries from the power, railway, road, shipping, civil aviation, and coal ministries, as well as the deputy chairman of the Planning Commission, to discuss the projects he had in mind.

His plan, which he believes could help return the national economy to the 9% growth rate it once had, would necessitate a huge investment worth an estimated $1 trillion for five years of construction. The government, unable to achieve that kind of revenue on its own, would be required to involve private investors through public private partnerships (PPP), as well as foreign investors.

Singh listed a number of projects that would be included in the huge infrastructure revamp:

  • 5 railway projects

  • 42 shipping ministry projects

  • Work for 9,500 kilometers (5,903 miles) of road, and maintenance on 4,360 kilometers (2,709 miles) of road

  • 2 airline hubs at Delhi and Chennai

  • 3 new airports

  • 18,000 MW capacity to power sector

  • Dispatch of 470 million tons (MT) of coal

In the first three months of 2012, economic growth within India fell to a low not seen in nine years. This major slowdown has been attributed to government scandals, which have taken the focus away from industrialization.

But Singh wants that to change. As he said in his meeting:

“India is at a critical juncture in its quest for prosperity and eradication of poverty...We are running into more turbulent weather...There is a need to revive business and investor sentiments...and a need to create an atmosphere conducive to investment...”

“In the short term, development of infrastructure will boost investment rates across the economy. In the long run, it will remove the supply constraints that affect economic activity in agriculture, industry and trade.”

Infrastructure stocks rose after the announcement of this new plan, but Sanjay Reddy of GVK Power and Infrastructure told Reuters that no one knows what will happen next:

“It is good that the prime minister has started looking at the infrastructure sector. But the devil is in the details and we will need to wait and see what happens over the coming weeks.”

The Best Free Investment You'll Ever Make

Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the newsletter below.

Enter your email:
We never spam! View our Privacy Policy

You'll also get our free report, Six Oil & Gas Steals

GVK Power and Infrastructure Ltd. (NSE: GVKPIL) is involved in power generation and power plant service, roads, and the airport and oil and gas sectors, many of the fields in which the prime minister has listed plans. The stock was up even higher today than last week, closing up 3.14% at 14.80.

GMR Infrastructure (NSE: GMRINFRA), another infrastructure company, closed up 4.62% at 22.65.

Investment agreements from foreign ministers began as early as this week. On Monday, India's Minister of Commerce and Industry, Anand Sharma, engaged in talks with the Brazilian Minister of Development, Industry, and Foreign Trade, Fernando Pimentel.

The two discussed the possibility of Brazil's involvement in the infrastructure projects, and a Memorandum of Understanding (MoU) was signed for cooperation in a number of areas of the sciences.

On Tuesday, Indian Union Minister for Road Transport and Highways, Dr. C.P. Joshi, also signed a MoU with Canadian counterpart Denis Label for infrastructure, road maintenance, and transportation.

More agreements like these, in addition to private sector investments, are likely to occur in the near future.

Energy demand will increase 58% over the next 25 years.

Trillions will be spent to secure the world's energy supply over the next two decades... and all sources are on the table.

Oil, Natural Gas, Solar, Wind. There will be money made.

Follow the money trail. Sign up for Energy and Capital now--It's free.

We never spam! View our Privacy Policy

By signing up, you'll also get our latest report, Six Oil & Gas Steals.

Related Articles

India Solar Investment
Natural gas is king in the United States, but solar is booming in India.
Global Infrastructure Investment
The U.S. needs to invest $2 trillion to rebuild bridges, water lines, sewage systems and dams, in addition to roads, that are reaching the end of their life cycles.
G-20 Infrastructure Investing
Global infrastructure investments may not be exciting, but they have doubled over the past two years... and things are about to get even hotter.
Investing in Oil and Gas Infrastructure
There's a safer way for investors to find oil profits...

Where is the Oil Cycle?
Coal Investing Destroyed After Centuries of Dominance
Renewables Take Over
Marijuana Bank Investing
3 Guaranteed Profits: Gambling, Prostitution, and...
Russian Stocks are Cheap
Fortune Favors the Bold
Nuclear Investing After Iran Deal
Look at China
Invest in the Lithium Revolution
Lithium Demand is Going Berserk
Investing in the Tesla (NASDAQ: TSLA) Powerwall
Tesla (NASDAQ: TSLA) Just Killed Your Power Company
Tesla (NASDAQ: TSLA) Powerwall Investing
How to Make $800 Million in One Week!
Putin and Saudi Arabia: Oil Dream Team Meet
Marijuana Bank Investing
3 Guaranteed Profits: Gambling, Prostitution, and...