The pace is slow

Written by Mahesh Y Reddy | Updated: Sep 21 2011, 06:38am hrs
Infrastructure building and road development did receive due policy attention in the current Plan. Outlays were significantly scaled up for national highways and rural road development. Private sector participation and wholly owned foreign direct investment in highways were encouraged. Still, our road network remains under-funded.

Investment in road infrastructure as a percentage of GDP has gone up only marginally from 0.79% in the Tenth Plan to 0.97% in the Eleventh Plan. Besides, the share of roads in total infrastructure investment, which was 15.28% in the original projections of the Eleventh Plan, has been scaled down to 13.57% in the revised projections. Figures point to a decline in central government investment in the sector during the Eleventh Plan to R90,916 crore from the original projection of R1,07,359 crore.

In the last two years, the government has constructed 4,474 km of highways against the target of 5,565 km set by the Planning Commission. No wonder, on an average, road construction is reportedly taking place at 9.09 km per day even though industry sources feel the actual is around 3-4 kmfar below the goal of 20 km per day.

The situation is not any better in the states. Available figures show fund allocation for roads and bridges as a proportion of total expenditure of states has been a meagre 1.6% in 2010-11. Most states spend 1% to 4% of their total expenditure on developing road infrastructure, with many states like J&K, Punjab and West Bengal allocating even less than 1% on revamping roads.

Higher Plan allocations for the states, however, improved the quality of road networks. According to CMIE data for 2007-008, Uttar Pradesh reported around 11% of paved roads in India. Close on the heels are Andhra Pradesh (9.9%), Maharashtra (9.3%), Karnataka (8%), Tamil Nadu (7.7%), Gujarat (6.9%) and Rajasthan (6.4%). The low proportion of paved roads could be attributed to the general neglect of the hinterland even in the relatively advanced states.

Several state governments have started taking road development initiatives through enabling legislation and private road projects. The states investments in roads have risen to R1,41,855 crore in the Eleventh Plan against the original projection of R1,00,000 crore on account of higher investments under the PMGSY. This is a welcome sign.

Deficiencies in building road infrastructure have to be met through private sector participation at the central and state levels. However, the fact remains that private sector investment in road projects, at R45,887 crore during the Eleventh Plan, is less than half of the revised projection of R1,06,792 crore for the period. Indeed, private sector participation remains hamstrung by the complex web of bureaucratic policies and procedures. This is a major deterrent to private participation in road building.

Friendly land acquisition policies and bidding procedures are required to encourage private sector participation in road building. The present land acquisition polices are not attractive enough for private sector participation and should be reviewed.

A facilitative policy environment through transparent bidding processes and faster land acquisition and environment clearances are the basic prerequisites for greater private investment in roads. This should be supplemented by provision of affordable credit.

The writer is director-general, Infrastructure & Logistics Federation of India