Indian economic survey calls for rapid reduction of infrastructure deficit

Friday, February 25, 2011

NEW DELHI - The Economic Survey 2010-11 has said that rapid reduction of the infrastructure deficit was the key to competitiveness in an increasingly localized environment.

The Survey highlights that financing infrastructure would be big challenge in the coming years and to meet the challenge, innovative ideas and new models of financing would be required.

Channeling domestic and foreign financial savings of this scale into infrastructure requires a judicious mix of policy interventions, which balances the growth and stability objectives.

The Survey calls for huge capacity addition in infrastructure in a time bound manner while ensuring that projects embodied value for money and investment results in world class infrastructure. Infrastructure should be at the same time affordable and sustainable.

The Survey also calls for urgent action for addressing the programmes of tending of unviable projects, bad quality of engineering and planning at DPR stage, lack of standardized and sub-optimal contracts, land acquisition delays and slow approval processes especially environmental and forest clearances.

The Survey observed that it is important that the 80 per cent minimum norm for physical acquisition of land before tendering should be strictly enforced through suitable disincentives.

According to the survey, significant upfront investment in engineering and planning is required for all projects.

Investment in building managerial and technical capabilities of executing agencies at par with the private sector is crucial. A way forward would to kick-start a construction-focused vocational training programme through a commercially viable PPP.

The Survey advises that there is a need to reassess the existing criteria and priorities used for allocation of funds to different sectors, for example, taking into account the growing need for peaking power rather than the base load capacity in the power sector, greater focus on rail and water transport, more demand-side measures in water rather than making huge investments in water supply augmentation. It calls for a macro-level approach and a greater inter Ministerial coordination. (ANI)

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