New Delhi: India's ambitious target of Rs 41 lakh crore investments in key infrastructure sector in the 12th plan period (2012-17) is likely to face a financing shortfall of upto 30 per cent or Rs 12.3 lakh crore, Finance Minister Pranab Mukherjee has said.

"While I am hopeful of meeting the target for 11th Plan investment, as per our preliminary estimates, there may be a substantial gap of upto 30 per cent in financing the even more ambitious target of Rs 41 lakh crore of investment in infrastructure for the 12th Plan period," Mukherjee said.

The Finance Minister told the Parliamentary Consultative Committee attached to his Ministry that the fundamental constraint in infrastructure financing was linked to asset liability mismatch of the banks and their concentration risk concerns, an official statement said.

India is heavily dependent on banks to fund its infrastructure projects. Bonds market is largely untapped as India's stock of listed non-public sector debt is estimated at a meagre two per cent of GDP.

A robust corporate bond market can help banks address their asset-liability mismatches and bridge the financing gap.

Mukherjee said regulatory changes were needed to attract more foreign capital, especially debt capital, to fund infrastructure projects in the country, reports IANS.

He also highlighted the need to strengthen the corporate bond market and develop credit enhancement mechanisms to enable infrastructure projects, typically non-recourse special purpose vehicles, to access long-term funds from insurance and pension funds.

On development of infrastructure projects in the current plan period, Finance Minister said during the first three years of the plan period actual investment has exceed the target by 9 per cent.

While the plan panel had set a target to invest Rs9,81,119 crore during the first three years of the 11th plan period, the actual investment was Rs 10,65,828 crore. This is 7.1 per cent of the GDP and 9 per cent more from the target.