India?s infrastructure needs are mammoth. No less impressive are the funding requirements for core sectors and the government has been working hard to find the money to fill critical gaps in power, roads & highways and civil aviation.

The figure has now been put at a whopping Rs 20,18,709 crore ($492 billion). This is almost two-and-a-half times the Rs 8,22,193 crore spent on infrastructure in the 10th Plan.

While the government is busy trying to figure out how to raise so much money, a look at some ongoing central infrastructure projects tells an interesting tale. According to government estimates, as many as 267 projects (out of a total of 890 projects) in sectors like power, railways and petroleum are running behind schedule by at least two months to as long as 16 years in some extreme cases. Delays in these projects are estimated to cost the exchequer over Rs 20,948.69 crore.

Some of the significant projects that are running behind schedule and have incurred cost overruns include parts of the high-profile Golden Quadrilateral on National Highway 2 and Jawaharlal Nehru Port Phase-II on state highway 54. These projects cost Rs 1,000 crore and more.

The total estimated cost of all the 890 infrastructure projects was over Rs 1,38, 860.56 crore, which has inflated to about Rs 1,60,391.97 crore. The total expenditure up until December 2006 has been about Rs 1,38,905 crore, around 37% of the anticipated cost.

The petroleum sector has 25 out of 37 projects overdue, and has borne the maximum cost overrun of Rs 10,183.13 crore. The original approved cost for the projects was Rs 36,182.93 crore, which was revised to Rs 46,366.06 crore.

Even the civil aviation ministry has 12 of 25 projects running late by at least two years. Some of the ministries reporting a large number of delayed projects are road transport (86 out of 205), railways (33 of 276), telecommunication (32 of 55), power (19 of 76), petroleum (14 of 36) and shipping (15 of 36). Some of the factors contributing to the delays include a lack of funds, land acquisition issues and the law & order situation.

It is common knowledge now that the government intends to increase investments in infrastructure from an estimated 5% of GDP in 2006-07 to almost 9% by the terminal year of the 11th Plan. As the public sector alone will not be able to arrange for funds of such magnitude, the government will undertake a two-pronged strategy: an increase in public sector investment as a percentage of GDP and also an increase in private sector funds through some form of public-private partnership.

Public sector investments would give priority to meeting the requirements in sectors like irrigation, rural roads, electrification, water and other areas where the private sector would be reluctant to invest. A resource constraint has been the major stumbling block for the development of infrastructure in the country. According to recent calculations, public and private sector companies are projected to require at least $31 billion (Rs 1,22,263 crore) from external commercial borrowings to finance infrastructure projects.

In the current Plan period, both public and private sectors would require a debt component of Rs 9,85,702 crore ($240 billion). The total availability of debt funds to finance infrastructure projects is estimated at Rs 8,25,539 crore ($201 billion), leaving a gap of Rs 1,60,164 crore ($39 billion). Domestic banks are expected to contribute Rs 4,23,691 crore and credit from non-banking financial companies would be Rs 2,24171 crore. Resources from pension funds and insurance companies are projected to be Rs 55,414 crore. The Planning Commission has also calculated a deficit of Rs 1,60,164 crore ($39 billion) to finance infrastructure projects in sectors like power, highways and rural roads.

This has come at a time when the UPA government is already preparing for elections and the funds crunch for crucial sectors could cause some pain. The resource crunch comes despite having included all private players? investments and PPPs, and might even stall the mega airport modernisation programme.