SBI Chairman Explains How Big Infra Projects May Drive Economy

A day after the cabinet announced its big-ticket infrastructure plans, State Bank of India (SBI) chairman Dinesh Kumar Khara said such large projects could have "large multiplier effects" up to four times on the Indian economy.

Such projects encourage all the core sectors of the industry, be it cement, steel, or iron ore, Mr Khara told NDTV Profit in an exclusive interview. They also de-clog logistics, he added.

The all-weather Vandhan Port in Maharashtra worth Rs 76,000 crore and a viability gap funding of Rs 7,400 crore for 1GW offshore wind energy projects in Gujarat and Tamil Nadu are among the major infrastructure projects that received the cabinet go-ahead yesterday.

The energy project is the first of its kind in India and will help exploit opportunities available on the shores. It will give a significant advantage to the coastal belt, said Mr Khara.

The cabinet has also announced Rs 2,870 crore for the expansion of the Lal Bahadur Shastri International Airport in Varanasi.

Such large projects are also drawing increased interest from the foreign investors and the long-term capital available across the world will find its way to India, said the SBI boss.

"There is a huge demand for these services (ports and wind energy) in the economy. That demand will be something that will make it (the projects) commercially viable too," said Mr Khara, adding that the SBI is keenly watching out for the offshore wind energy sector.

The SBI's overall corporate loan book stood at Rs 11.38 lakh crore on March 31 while its infrastructure lending book stood at Rs 3.94 lakh crore, power sector loans at over Rs 2 lakh crore, and roads and ports were at Rs 1.12 lakh crore.