India has been urbanising at a rapid pace, where we need to create many new cities over the next decade. All this requires infrastructure investment. More, if India wants to once again grow at a higher GDP growth rate, one of the key objectives will be to provide an impetus to infrastructure investments through policy and structural reforms. For instance, to finance India’s huge infrastructure requirement of $1 trillion, there is a need to overhaul some policies and adopt innovative ways of financing.
If one looks at infrastructure in India, virtually every parameter scores poorly: We are perennially power-starved. Per capita power consumption is 1/3rd that of China and 1/20th that of the US; despite a 67 per cent capacity addition in major ports during the past five years, the average time for clearing cargo is 20 days — five times slower than Singapore; 5,000 km of highways have been added over the past four years but still two per cent of Indian roads carry 40 per cent of traffic; there has been only a three per cent increase in railways’ route length and a five per cent increase in track length over the past decade. However, there have been some positives that were accomplished in the 11th Five-Year Plan. While the projected investment for the Plan was Rs 20.56 lakh crore, investment was Rs 19.45 lakh crore, reflecting an achievement of about 95 per cent of the projected investment.
Looking at the future of businesses, infrastructure development has to be the pivotal factor. It is envisaged that India would need Rs 51.46 lakh crore of investments during the 12th Plan. Of this, 47 per cent is expected to come from the private sector. Eighty per cent of the investment in the 12th Plan is expected to go towards key sectors of power, roads and bridges, telecom and railways.
India’s infrastructural goals are clearly doable. All we need is speedy project clearances and well-defined policies, and strong political will can ensure that this can happen. Fortunately, regulatory reforms are taking place with a growing awareness that we must pursue our infrastructural dream with a renewed vigour to ensure that India’s billion-plus population receives better quality of life.