India Infrastructure Growth

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In the last decade or so, India Infrastructure Growth has been propelled specially in transport sector with adequate intervention of Central and State Governments aided by a host of private investments from within and outside the country.

Development of Urban Infrastructure in India has been fairly insignificant in the last few decades barring a few large projects in a handful of cities.

According the India Infrastructure Report 2006, prepared by Mr. Anupam Rastogi of 3iNetwork (IDFC, IIM, Ahmedabad and IIT, Kanpur), while city mass transport systems and airports have found place in developmental plans. On the contrary, essential services such as roads, drinking water, sewage management, drainage and primary health, have barely been considered as a subject of Infrastructure Development in India.
While efforts are being made to develop urban infrastructure in a sustainable manner, Government wants the Urban Local Bodies to share the burden of planning and development of urban infrastructure.

The burning example which can be put forward in this regard is the flooding in Mumbai in the last three years that had aroused a conflict between the Brihanmumbai Municipal Corporation (BMC) and the Government of Maharashtra.
The Government is now putting in place a policy framework under the Jawaharlal Nehru National Urban Renewal Mission, which, would allow large infrastructure projects to come up on Public-Private Partnership (PPP) basis.

India's agenda to promote PPP for infrastructure development aims at enhancing the quality and quantum of infrastructure services, releasing the full potential of Public Sector Assets and ensuring that stakeholders receive a fair share of benefits from the PPP projects.
The partnerships would be backed by the proposed India Infrastructure Finance Company (IIFC) and the Viability Gap Fund Scheme (VGFS) which hold the promise of faster financial closure of infrastructure projects without overburdening the nation's public finances.
In order to manage a complex PPP Programme, the Government is leaning heavily on the project appraisal and skills to prioritize financial institutions that are also partners in lending to infrastructure projects.

However, a disturbing sign in the development of infrastructure in general, and PPP in particular is Government's inclination to curb the powers of regulators. The need of the hour is to ensure that irrational policy measures do not take a toll on the pace of acceleration of reforms.

The IIFC, and the scheme to support PPP in infrastructure can be hoped to go a long way in construction of large infrastructure projects in the country.

Thus, India Infrastructure Growth is on the right track to aid development of allied sectors.

Last updated On: 7th May 2011

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