Emphasising that India is taking steps to address problems in the infrastructure sector, Finance Minister Arun Jaitley today said multiple institutions are required to meet the funding requirements in this space.
The finance minister also said the country has crossed that stage when change of government in power used to result in problems for an infrastructure project, adding that now the dispute resolution mechanism has been made very robust.
“To add to the comfort of the investors, we have been upgrading our laws. I am working on a new mechanism that would do away with the requirement for going to judicial panels for resolution of dispute… It is at an early stage and it is not proper to divulge more details,” he said at the World Economic Forum (WEF) annual meeting here.
While acknowledging that there are many problems too on the infrastructure front, Jaitley said the government is taking steps like setting up of infrastructure funds where it has also invited international institutions among others.
Jaitley also dismissed suggestions that the political opposition was any more hurting infra projects in India, as no party can afford to oppose a project being built for the benefit of the people. Today’s aspirational society is rather asking why projects cannot be done faster, he added.
“You require multiple institutions for financing infrastructure. Asian infra was suffering for a long time due to lack of availability of right funds. Infra funding has to be long term in nature.
“Now, we have multiple institutions such as ADB, BRICS Bank, AIIB and even World Bank is there. There are areas that can be given funding from within the country,” he noted.
The finance minister said projects are under way in India to link a large number of villages with roads, highways and other infrastructure and a reasonable amount of finance has been generated for such projects.
Speaking at a session on ‘Asia’s era of infrastructure’, Jaitley also dismissed suggestions that the failure to pass new land law was hitting the infrastructure projects. “Even the existing law provides that infrastructure projects are not impacted by issues related to land acquisition,” he added.
Jaitley noted that the national highway building programme is going very strong, road connectivity is being improved, modernisation of airports and ports as well as construction of new ports, all are going well on track.
“The government is now working on modernisation of railway stations and 400 major stations are being re-developed in partnership with private players. In some projects like national highways and roads, the government funding is also available,” he said.
About comparing India’s infrastructure development with that of China, Jaitley said China embarked on its economic expansion plan long before India.
When India finally began opening up, the policymakers at that time probably had a fear of unknown on whether there would be political opposition to the decisions taken by them, he noted.
“But that time is over and today every political party is in power in some part of the country and I think that in aspirational societies like India, the phase of opposing infrastructure projects does not arise. In fact, at times, people ask why it should not be done faster,” he said.
To a query on how to convince local communities, Jaitley said the local communities would always get involved whether it is about land acquisition or awareness of benefits that a road or railway track can bring.
“Media, social media, television all play a role in creating awareness. When infrastructure reaches a particular region, people would always welcome it,” he added.
His co-panelists included Indonesian Finance Minister Bambang Brodjonegoro, Asian Infrastructure Investment Bank President Jin Liqun, Mitsubishi Corp Chairman Yorihiko Kojima and Stanford University Professor Jim Leape.
Liqun said it is very important for AIIB to begin on a ‘squeaky clean’ slate and downplayed criticism that the bank was largely controlled by China — being the largest shareholder — and that funding could show a bias towards Chinese infra projects.
He clarified that the bank was owned by seven countries as of now, including India.
Kojima said infrastructure creation is very important in Asia and the companies need to communicate effectively with the government in doing such projects.
According to Brodjonegoro, infrastructure development itself can be a big economic growth framework for countries in Asia. For most Asian countries, the most important things for creating infrastructure include providing funding, he added.
AIIB President Liqun said the bank is going to launch a major consultation process on how would it go for the funding.
Asked whether it would have a ‘no-go’ list such as nuclear plant which it would not fund, he said it would be too early to talk about such things before the consultation process.
“Nuclear power is obviously clean, but people are concerned about it including on the safety of the power generation stations,” he added.