On the eve of its maiden Budget, the newly elected Government highlighted in the Economic Survey for FY14 that lack of consistency in policies requires urgent redressal apart from removing procedural bottlenecks to keep India’s infrastructure juggernaut rolling.
In this light, the Government has pointed out that there is a strong need for identifying a core set of infrastructure projects that are crucial for accelerating economic growth and channelising investment in them with the aim of expediting their implementation.“Removing procedural bottlenecks, improving governance, and above all maintaining consistency in Government infrastructure policies are some issues that need to be urgently addressed for sustainable infrastructure development,” the document laid in Parliament by Finance Minister Arun Jaitley observed.
It expressed concerns that as many as 110 out of 239 central sector infrastructure projects, each costing Rs1,000 crore or above, have reported delays, which range up to 26 months in case of steel, coal, power and petroleum projects.“The total original cost of implementation of these 239 projects was about Rs7,39,882 crore and their anticipated completion cost is likely to be Rs8,97,684 crore, implying an overall cost overrun of Rs1,57,802 crore (21.3 per cent of the original cost,” said the survey.
Infrastructure, the document said, will continue to be a bottleneck for growth and an obstacle to poverty reduction” unless sectors particularly transport, energy and communication, put under enormous burden due to recent years rapid economic growth, are significantly improved.Further it stressed the need for tackling on war-footing issues like problems in land acquisition, delays in regulatory approvals and environment clearances.
Pinning hopes on revival of investment the survey said, “need has been felt to kickstart stalled infrastructure projects by stepping up infrastructure investment and increased private participation will usher in desired funds”.Government is promoting public-private-partnership for bringing private sector efficiencies in creation of economic and social infrastructure assets and for delivery of quality public services.
By end of March 2014, there were 1,300 projects in the sector with the total project cost of Rs6,94,040 crore, it said adding to promote PPP, government is providing viability gap funding, support for project development, capacity building programmes and other tool kits, the survey said.It mentioned that while growth in power and fertilisers segments was higher, sectors like coal, steel, cement and refinery witnessed lower growth.The performance of the coal sector in the first two years of the 12th Plan has been subdued with domestic production at 556 million tonnes in 2012-13 and 566 million tonnes in 2013-14.
The document said that India needs coal in the range of 715-720 million tonnes and to meet the deficit it resorted to imports to the tune of 169 million tonnes.While the growth in production of power and fertilisers was comparatively higher than in 2012-13, coal, steel, cement, and refinery production posted comparatively lower growth. Crude oil and natural gas production declined during 2013-14, it said.
Power generation fell short by nearly 8 billion units of the target of 975 billion units in the last financial year but it was 6 per cent higher compared to 2012-13. It has added 38,583 MW capacity till April 2014 as against a target of 88,537 MW for the 12th Five Year Plan, added the survey.