The financing issue relates not only to possible resource gap, but also to ensure commercially viable funding that remains so over business cycles. Infrastructure investment during the Twelfth Plan will need to be funded by both, public and private sectors. Despite increasing participation of the private sector in bridging the infrastructure gap, public investment still has to play a significant role.
Fiscal consolidation and reorientation of expenditure towards capital expenditure is required to meet the target. The banking system, despite the risk of assetliability mismatch while lending for long-term infrastructure projects, has seen high growth in credit to this sector in recent years.