Financing Infrastructure in India: Macroeconomic Lessons and Emerging Market Case Studies
IMF Working Papers, August 1, 2011
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- Financing Infrastructure in India: Macroeconomic Lessons and Emerging Market Case Studies
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Bibliographic details
- Authors: James P Walsh, Jiangyan Yu, Chanho Park
- Published: August 1, 2011
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781462310296.001
Study scope and structure
- Two-part study:
- An empirical analysis of macroeconomic risks associated with infrastructure booms.
- A case study of four emerging economies about their practice of funding infrastructure development.
- Authors: James P Walsh, Jiangyan Yu, Chanho Park
- Publication date: August 1, 2011
- IMF Working Papers, Working Paper No. 2011/181, Issue: 181, Volume: 2011
- Pages: 32
- DOI: https://doi.org/10.5089/9781462310296.001
- Stock No: WPIEA2011181
- ISBN: 9781462310296
- ISSN: 1018-5941
Key empirical findings
- There is no empirical evidence that rapid infrastructure growth would undermine contemporary macroeconomic performance, implying that room is created to accommodate infrastructure booms without compromising fiscal and external sustainability.
- Banks may play an important role in financing infrastructure, but caution is needed to avoid directed lending and regulatory forbearance that the authorities may use to promote financing.
- Capital market development is important to accommodate the usually high financing needs, and encouraging private investors to move into infrastructure would require regulatory and institutional improvements.
- Public support, including credit guarantees, may help bolster investors' confidence, but the authorities should carefully monitor and manage fiscal risks.
Policy implications and recommendations
- Banking sector:
- Recognize the important role banks can play in infrastructure financing.
- Avoid policies that encourage directed lending or regulatory forbearance as mechanisms to promote infrastructure finance.
- Capital markets:
- Develop capital markets to meet high infrastructure financing needs.
- Implement regulatory and institutional improvements to attract private investors into infrastructure.
- Public support and fiscal management:
- Consider public support instruments (for example, credit guarantees) to bolster investor confidence.
- Carefully monitor and manage associated fiscal risks arising from public support measures.
Thematic coverage and keywords
- Subjects: Bonds, Commodities, Electricity, Expenditure, Financial institutions, Financial markets, Infrastructure, National accounts, Public investment and public-private partnerships (PPP), Securities markets
- Keywords (as provided): bank, Bonds, capital market, Chile, corporate bond market, Electricity, financial support, fixed income, Global, growth, Infrastructure, infrastructure financing, infrastructure investment, investment, market, North America, ordinary shares, policy bank, preferred shares, private equity, Public investment and public-private partnerships (PPP), public-private partnership, Securities markets, South America, WP
IMF Working Paper: "Financing Infrastructure in India: Macroeconomic Lessons and Emerging Market Case Studies", James P Walsh, Jiangyan Yu, and Chanho Park, August 1, 2011, Working Paper No. 2011/181 (Pages: 32; DOI: https://doi.org/10.5089/9781462310296.001; Stock No: WPIEA2011181; ISBN: 9781462310296; ISSN: 1018-5941).