President Underlines India's Ambitious Plan to Boost Infrastructure

June 10, 2014
The government promised to develop low-cost airports to promote air connectivity to smaller towns.

June 10--NEW DELHI -- The new government will implement an ambitious development programme in the next 10 years to bolster India's rickety infrastructure.

It will put in place a fast, investment-friendly and predictable public-private partnership (PPP) mechanism. It will also aim to provide a single window for clearances -- both at the centre and in the states -- through a so-called hub-and-spoke model, President Pranab Mukherjee said on Monday.

Mukherjee underlined the government's plans for all the sectors, emphasizing that modernization and revamping of the railways will on top of its infrastructure agenda.

"My government will launch a Diamond Quadrilateral project of high-speed trains," said Mukherjee, referring to a pledge made in the Bharatiya Janata Party's election manifesto.

The Narendra Modi government appeared to have taken a leaf out of a major infrastructure project that was announced by former prime minister Atal Bihari Vajpayee, also of the BJP, in 2011 that was called the Golden Quadrilateral project -- a network of highways connecting Delhi, Mumbai, Kolkata and Chennai.

The president added that existing ports will be modernized even as the government develops new world-class ports in tandem.

"The government will evolve a model of port-led development. Our long coastline will become the gateway for India's prosperity," Mukherjee said. "Stringing together the Sagar Mala project, we will connect the ports with the hinterland through road and rail. Inland and coastal waterways will be developed as major transport routes."

For the road sector, reeling under the pain of slowdown, the government promised a time-bound and well-monitored programme of building national highways.

The government also promised to develop low-cost airports to promote air connectivity to smaller towns.

The other areas where infrastructure will be given priority include agriculture, energy, urbanization, trade and manufacturing. "Taking urbanization as an opportunity rather than a challenge, the government will build 100 cities focused on specialized domains and equipped with world-class amenities. Integrated infrastructure will be rolled out in model towns to focus on cleanliness and sanitation," Mukherjee said.

"The President's speech was a reiteration of the agenda mentioned in the BJP's election manifesto," said Vinayak Chatterjee, chairman and managing director of infrastructure services firm Feedback Ventures.

The new government's emphasis on infrastructure is not surprising as the earlier Congress-led United Progressive Alliance government was widely criticized both for its inability to execute big-ticket infrastructure projects and for delays in several others on bottlenecks in environmental clearances and land acquisition.

"India, given the rate of its urbanization and growth, needs to develop roads, cities and ports in a major way. Investment in infrastructure directly contributes to economic growth," said Abhaya Agarwal, a partner at EY Llp who oversees the infrastructure practice at the consultancy.

"In the last two years, investment in infrastructure, especially private sector investment, has gone down by more than 50%. This affects gross capital formation and growth of the country. So it's more a question of playing catch up than being ahead of the curve," he added.

Copyright 2014 - Mint, New Delhi