The government is likely to set up a fund to facilitate investment of over

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Rs 45 lakh crore in the infrastructure sector during the 12th Plan (2012-17) and ensure an economic growth rate of about 9-10 per cent during the five-year period.

As part of the exercise to step up infrastructure sector funding, the government will also fix annual targets for ministries like road, railways, power and telecom, and would monitor implementation of the projects.

"In a bid to boost infrastructure development, besides setting annual targets, the government would make provision for periodically monitoring of such projects to ensure desirable growth of the sector," an official source said.

To be set up after procuring funding from multilateral lending agencies like the World Bank and the Asian Development Bank (ADB), financial institutions, insurance companies and pension funds, the dedicated fund would provide money to infrastructure sector projects with long-gestation periods.

The decision to set up an effective mechanism to ensure sustainable investment in infrastructure sector was taken at a meeting of the Planning Commission headed by its Deputy Chairman Montek Singh Ahluwalia yesterday.

During the meeting it was pointed out that infrastructure development in general and roads projects in particular, failed to take momentum in past 6-7 years despite maximum government efforts and after setting up of task force under Prime Minister Manmohan Singh in UPA-I.

"Of late, indications are that infrastructure is gaining momentum after the economy showed sign of recovery after global meltdown," it was also noted in the meeting. Ahluwalia had earlier said that 50 per cent of investment in the infrastructure development during the 12th Five-Year Plan would come from the private sector if the country is to realise an investment target of over USD one trillion (over Rs 45 lakh crore) in next Plan period.

During an infrastructure summit here, the Prime Minister had announced to double the investment target in infrastructure to USD one trillion in the 12th Plan compared to USD 500 billion in the current Plan.