Gandhinagar : India needs $ 800 billion (Rs 50 lakh crore) annually if the economy is to grow at 7%, Financial Services Secretary Hasmukh Adia said at the Vibrant Gujarat Summit.
Noting that last year fund inflows from all traditional channels of FDIs, ECBs, FIIs and domestic capital was way below $ 200 billion, he said that government, planners and the industry would have to find alternate sources for this huge amount to finance growth.
While $130 billion came from domestic financial institutions and banks, $ 13.4 billion came from foreign institutional investors, FDI was worth $21.6 billion and $ 32 billion came through the ECB route, he said.
He said that net foreign institutional investments and net FDI investments were only about $ 35 billion last year. The ECB component was $ 32 billion. Adia noted that developing a vibrant corporate bond debt market can come as big help to fill the gap, which is only a 1.6 % of present requirement.
Giving numbers in other economies where it is much higher — 38 per cent in South Korea, 20 per cent in the US and 17 per cent in Japan from corporate bonds — Adia said, “We need to develop the corporate bond market”.
