Infrastructure Funds

India's economic performance, particularly over the past three years, has been robust on several counts. Economic growth has accelerated and is now averaging over 8% per annum.

In order to sustain this rate of economic growth, India's Planning Commission has estimated that investment would have to be made in infrastructure, such as road, rail, air and water transport, electric power, telecommunications, water supply and irrigation. During the Eleventh Plan period (2007-2012), it was estimated that an investment of almost US$ 320 billion would have to be made over the Eleventh Plan period.

Due to government initiatives, investments in India's infrastructure development are growing. Political parties, across ideologies, have realized the importance of infrastructure in sustaining economic growth. The Government recognizes the need to improve infrastructure and has stepped up investments in this direction.

Several indicators in the economy today point to the huge investments being made by both the Government and the private sector in infrastructure development. Some of them are:-

• India's construction equipment sector is growing at over 30% annually
• The order books of the 10 largest construction companies in India have risen by over 50%year-on- year
• Annual cement consumption has breached the150-million tonne mark for the first time.

Source: - India Brand Equity Foundation

According to India Brand Equity Foundation, investment requirements in some key sectors are:

• US$ 50.8 billion for modernization of highways
• US$ 9.25 billion for civil aviation
• US$ 11.5 billion for ports
• US$ 69.39 billion for railways

As we can see, there is a huge potential for profitable investments to be made in these sectors. Dedicated infrastructure funds such as Tata & ICICI Infrastructure Fund with its focus on investments in the Indian infrastructure sector, shows potential for long-term growth.
Investors who wish to be beneficiaries of this hugely developing sector can participate in it and create potential long term value for their investment.