Creaky infrastructure has been blamed as one of the drags on the growth prospects of Asia's third-largest economy, which policymakers expect to grow between 8 and 8.5 percent for the current fiscal that ends in March.

"We think our investment will probably be little short of the $500 billion target," Montek Singh Ahluwalia, deputy chairman of India's Planning Commission said on Thursday at a conference about meeting fast-growing India's needs for roads, ports, power and railways.

"I would not be surprised if it is 10 percent or even 12 percent short," he said.

Ahluwalia also stressed the need for more infrastructure debt funds, the guidelines for which will be released soon.

"We need several 10 billion dollar funds. I expect at least two ($10 billion funds) to start off (in the current fiscal year)," Ahluwalia said.

Over the next five years ending March 2017, India plans to invest $1 trillion in building infrastructure.

Copyright Reuters, 2011