Infrastructure development issues are currently being debated at high level seminars and specialised opinions being sought on the subject. The growing inadequacy of infrastructure in terms of both quality and quantity has resulted in such debates. With India fast moving ahead and the finance ministers trying their utmost best to accelerate the impossible task of hastening infrastructure, yet much needs to be done.

Quality improvement required
The question is how and from where is infrastructural growth going to come from? This far, the existing infrastructure has been accepted the way it is without any attempts being made to improve upon its quality. But now when Indian growth potentials are getting submerged it has suddenly dawned on the policymakers that infrastructure is not of the right quality.

Role of government
It is an accepted fact that the central government bears the onus of providing the necessary infrastructure. The government on its part is trying to convince all and sundry that its doing its best to provide the best infrastructure. But the Indian industry argues that inadequate infrastructure is the biggest threat to the country’s future growth and is the worst constraint restricting India’s competitiveness globally.

Not only industry even the common man on the streets is faced with jam packed railways, submerged roads, blocked telephone lines, electricity breakdowns and is paying a heavy price for all these infrastructural inadequacies. Despite India now being in its 53rd year of independence and in its tenth year of liberalisation, it is a shameful fact that Indian infrastructure is still of the pre-historic ages and all money spent towards infrastructure upgradation have yielded no results.

Single-window clearance
Even today with economies worldover going paperless Indian clearances still require around 50-60 paper forms to be filled. There is no single-window clearance in practice although governments have put it on paper.

No doubt India today is recognised as an Asian giant. But, its ranking in world competitiveness among 50 countries stands at a pathetic 47. The basic cause being the poor infrastructure which is the major hurdle to enhancing overall growth. If you look at statistics the facts are glaring. Only 47 per cent of our roads are surfaced, very few villages have pucca roads, telephone penetration is abysmally low at five per cent.

Bureaucratic delays
What dark ages is India living in? Governments over the years have been announcing policies and have been increasing plan outlays to try and make investment into infrastructure more lucrative. But all this with no results. Take the case of the power sector - a basic infrastructure for any country to grow - which was one of the first sectors to be liberalised and foreign investment invited in a big way. But, if you look at the sector today, it is in bad shape.

The State Electricity Boards (SEBs) are deteriorating from bad to worse. Power generation and transmission is still way off the set target. Every year the gap between demand and supply is widening. Most of the industrialised states are caught in a trap as factories have to cut down production and the increasing number of shutdowns have resulted from an inadequate power supply situation. In the ninth plan there was a huge outlay for power but only 10-15 per cent of the target could be achieved of the required capacity-addition for the country.

Similar is the case with other sectors as well. Ports, roads, aviation, railways, et al are all victims of the same the system - government year on year keeps announcing policies without paying any attention at cleaning the system of its deficiencies.

Implementation required
By just announcing policies without their proper announcements no government in the world has ever been able to perform. Implementation of policies is crucial.What India really needs is not funds, which is secondary, but workable and practical policies which are brought in without bureaucratic delays and procedural hurdles. A transparent system with automatic clearance at all levels will not play wonders but will also help in bringing in the required funds.

Currently, development of roads rests with the state governments. But road acquisition is still the centre’s prerogative. This is faulty. It results in time delays and projects becoming unattractive. As infrastructure projects have long gestation periods any delay would mean escalating costs.

It is now taken for granted that infrastructure targets will not be met. India had started on the right note by appointing the Infrastructure Development Authority (IDA). But sadly so it has remained at that stage itself. Not much headway seems to have been made.

No headway so far
Targets are well off the mark. What needs to be looked into is whether the target fixing exercise is realistic or is it the government fixing high unachievable targets just to for popularity. What happens in actuality is that the funds earmaked for infrastructural development many a time gets siphoned off and there is no track record as to where the money has gone. Hence, accountability practices have to be made very strict where the end use of funds are listed. The issue about the government not having funds persists. But the raging debate is about the user charges as to whether the state governments will try and recover some of their costs. This has always been a controversial topic for debate what with several trade union bodies coming in into the picture as well.

Corruption root cause
Corruption in all quarters, poor institutional mechanism, unsatisfactory regulation and most importantly political populism have added to the woes of the poor infrastructure of our country. And the attitude among the masses is that using the public infrastructure without paying for it is his birth right.Well nothing wrong in that. For so many years the poor consumer has been paying the price and what he gets in return is only unjustified satisfaction.

Fiscal consolidation
Not only does government find cost recovery a problem even the private aspirants of infrastructure projects have voiced similar concerns. For instance, poor collection of toll charges for private highways, port tariff, power costs have lead to financial closure of many viable projects of major companies.

Meanwhile, the finance minister has accorded top priority to cutting down the fiscal deficit and reducing the subsidy burden. As to how he is going to achieve this is quite difficult to imagine even as one tenth of the country’s GDP subsidies go towards non- merit subsidies. Incomplete cost recoveries also have a direct impact on public finance. It is a grave problem which needs immediate attention. For a bankrupt treasury cannot do anything leave alone investing in infrastructure for which the money component is very high.

If government’s non-subsidy burden is accounting for a chunk of the GDP proceeds as to how future investments will come in is very unclear. The government is mum on this issue. In the ensuing years the government along with the opposition would do well to arrive at a consensus on this vital issue of infrastructure development. Certain drastic and concrete steps need to be taken to improve the infrastructure needs of the country which if desisted from would push India back many paces in its endeavour to become a world power.

Things to come
Sound practical policies is the requirement. If not, the pace of infrastructure development in the country will be affected. But it is not bleak all the way. A good beginning has been made with fundamental changes taking place in the economy ever since the initiation of reforms. A rethinking has begun on developing infrastructure for future growth of the country. The reform initiated for infrastructure include: competition in provision of basic services such as telecommunication, providing power utilities and levying of toll to recover costs.

Growth hampered
Legislative and legal amendments have been made both at centre and state level to usher in the required private investment. But this is not the end of it all. A lot more needs to be done. The state government finances are in doldrums. With the Indian economy growing and with the country’s population touching the billion mark, the states cannot take on such a huge burden. It is estimated that India’s infrastructure needs will be around US$ 300 billion in the next five years. So it is not the public sector, but the private sector has to play the role both of a mediator and a facilitator of finance in the future.

The government knows that it is beyond its capacity to provide huge funds and so has to put the ball in the courts of the private domestic investors as well as the international investors for bringing in the needed funds. The government should act fast for India to move ahead.

South East Asian experience
The government should realise that unless and until it does not introduce transparent policies and make the administrative clearance procedures less cumbersome FDI for infrastructure will not come in Today South East Asian countries after facing a severe currency crisis are today attracting more FDI.