The expected infrastructure investments have not taken place both in the private and public sector, he pointed out. The public sector investments were lower by 30 per cent of the projected figure while that of private sector was lower by 10 per cent and both have slowed down.
Mr Mohan said the private sector has responded to the changes but it would have responded more if the conditions were corrected. Making a strong case for an effective payment security mechansim to attract infrastructure investments in both private and public sector, Mr Mohan said people should also develop the habit of paying user fee for infrastructure services they enjoy. Mr Mohan pointed out that nearly 40 per cent of the poor people in the country were not in a position to enjoy the benefits of infrastructure services such as telecom or power and the government could take a closer look at subsidising these services. Obviously it is not the poor people who are using these services and enjoying the benefits of subsidies, he said. In this connection Mr Mohan criticised the recent decision to roll-back the telecom tariff hike and cautioned the government that without adequate tariffs telecom firms may face the danger of bankruptcy.
We have seen huge bankruptcy in the telecom sector internationally. Many big firms like Worldcom have gone bankrupt, he pointed out. Mr Mohan also said that the government must refrain from undercutting the regulator.
However, Mr Mohan has said telecom along with roads and ports are the success stories of infrastructre development in the decade of reforms.
The success in the road sector is a clear example of levying user charges in the infrastructure sector, he said citing the decision to have a cess on petrol and diesel for the highway development programme. Mr Mohan cited power sector, railways and urban infrastructure as the areas of failure in acheiving the goals.
The power sector, he said, was a clear case of failure and the problems in the sector could not be taken up without addressing the issue of large scale theft and dacoity going in the name of transmission and distribution (T&D) losses.