Government plans to set up a Rs 500 billion debt fund for power sector, says Power Secretary

India plans to set up a Rs 500 billion debt ($10.74 billion) fund for the power sector, Power Secretary P. Uma Shankar said on Thursday. "There are thoughts of setting up a debt fund. It is at a planning stage," Shankar said.The fund would be the latest in a series of recent government measures to overhaul India's creaky infrastructure, long seen as a drag on growth in Asia's third-largest economy.

A separate $11 billion debt fund for infrastructure has already been announced.Shankar said an investment of 5 trillion rupees was required to meet a target to build 100,000 mega watt (MW) generation capacity in 2012-2017.

India's Planning Commission said in a recent report capacity shortages in the power sector could prevent India from achieving double-digit growth. The commission predicts India will likely add 62,000 MW of power capacity in the five years to 2012, short of a 78,000 MW target.