Dinesh Kamath's Editorial 'Our government should focus on infrastructure' that was published in Newsband

Our government should focus on infrastructure

In India, public investment must be stepped up to provide the country enough infrastructure. The private sector would also have a role to play. Finance Minister Arun Jaitley in his first budget laid stress on rural infrastructure. The bad monsoon seasons which gave us crest and trough both, however, affected the economy negatively. The FMs concern for the development of rural infrastructure is the laudable one as due to this monsoon the worst affected are the rural masses. According to him India must have the intellectual honesty to analyse its shortcomings and improve them.

Paying private contractors to build highways has boosted cash flows and enabled a few to re-enter the fray for new projects. But infrastructure projects take time to show results. Yet, an honest introspection should reveal the need to utilise public infrastructure budgets more effectively without the cost- and time-overruns associated with the government’s ‘business as usual’ approach. India’s largest industrial infrastructure project, the Delhi-Mumbai Industrial Corridor, is crawling, though all the States along the corridor except Delhi are run by the BJP.

The finance minister should do everything by way of policy initiative to encourage central and state governments to invest in infrastructure. Effective decentralized infrastructure development is a key point.

Infrastructure development is essential for economic growth in major sectors like education and agriculture. Focus must be according to basic needs of the people rather than the corporate sector. Tapping of financial aid from international sources must be used effectively and at the same time one should not bow down to the pressure of conditions stipulated by those agencies to their own advantage.

For any infrastructure project, the main hurdles are land acquisition and finance. If the union and state governments work in tandem, there should be no constraint to achieve accelerated progress without any time or cost over runs.

Efforts made by the union government alone is not sufficient. Rural infrastructure improvisation is a state subject and state governments also need to push up investments - either through more capital account expenditure or PPP mode. This is not happening and implementation of PPP projects barring a few has not been satisfactory and private sector appears to be cautious to invest. Quality of road construction activity, more so by State PWD is again an issue

The ModI government has done an excellent job of selling India as growth story to locals and overseas investors. But everybody is waiting to confirm before making large bets whether the present government breaks out of the typical Indian manner of talking and not doing. For the sake of all, including themselves, this government should succeed in realising the growth plans on ground, not just in paper.