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Economy Oct 3, 2012

Parekh panel for hiking power charges, 100% FDI in telecom

Suggesting big-ticket reforms to attract investment in the infrastructure sector, a high-level committee today recommended increasing electricity charges and rail fares.

The high-level committee on financing of infrastructure, which is headed by HDFC Chairman Deepak Parekh, also pitched for 100 percent foreign direct investment (FDI) in the telecom sector. The limit at present is 74 percent.

Reuters

The panel also suggested raising prices of natural gas. These recommendations are aimed at attracting Rs 51.46 lakh crore for funding infrastructure sector during the 12th Five Year Plan (2012-17), said the report which was presented to Prime Minister Manmohan Singh earlier in the day.

The government, the report said, 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 percent of the projected investment during the 12th Plan".

The share of private sector in infrastructure funding was 37.53 percent during the 11th Plan, the report said, adding, the contribution of public sector is estimated to decline to 53.32 per cent in the 12th Plan from 62.47 percent in the previous Plan.

PTI

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