Boost investment in infra to propel growth: Azim Premji

BENGALURU: Azim Premji, founder chairman of Wipro, said the Indian government should further step up investment in infrastructure development to drive the country’s growth.
Premji, a tech services industry tycoon and philanthropist, said even if the government announced investment worth Rs 100 trillion in infrastructure projects spread over five years and have seen “significant progress in infrastructure development in the last few years”, the sector still represents 5% of India’s gross domestic product (GDP).

“There is enough demand and need that can propel growth to over 6% as demonstrated by China. We have scope to do a lot more,” said Premji at the 10th edition Excon, a construction equipment exhibition, here.

Premji has prescribed three key remedies to boost growth in infrastructure sector - bringing back private participation, re-establishing the flow of liquidity, and boosting job creation through sustainable growth.

“There are about 50 million people employed in this sector and reduction in pace of activity of even 10% would leave a significant impact socially... Sustenance of the pace of work is therefore very critical,” he said.

The Wipro founder chairman, who received the CII President’s Award for Lifetime Achievement for 2019, said it is important to settle all outstanding payments to contractors including regular payments based on project progress as well as part payments arising due to arbitration proceedings, without insisting on Bank Guarantees, to re-establish liquidity in the sector.

Parallelly, Premji said, a mechanism needs to be developed for long-term financing of projects that would reduce the dependency on banks.

“Elsewhere in the Globe large Pension Funds invest a good amount towards Infrastructure funding. Our norms towards such options should be looked into as today such funding is allowed for funding in projects with AAA ratings and above, which would mean essentially no risk taking. There needs to be a support in this area for risk taking by setting up specific financing institutions which could be owned by the Government,” he said.