Implementation of reforms a must prior to wooing funds
The Economic Survey has suggested that infrastructure sectors such as railways, power, urban infrastructure and civil aviation needs to see much greater reforms before investments can be made for inducing further growth.
In the power sector, the Survey has called for an urgent need to implement the much delayed power sector reforms such as rational tariff fixation by state electricity boards (SEBs), unbundling of SEBs specially at the distribution end and reduction in theft and transmission and distribution losses.
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In line with the recommendations of India Infrastructure Report 2002, the Survey has also said bulk consumers should be allowed to directly access power from producers paying suitable wheeling charges to the transmission and distribution companies.
These measures must now be taken with some degree of urgency if adequate power investment is to take place in the next 5 years, in both the public and private sectors," the Survey says The survey has urged the central government to induce state level reforms with a combination of incentives and penalties.
For the Railways, the Survey has pointed out that the government should launch a bold new programme for modernisation and expansion of the key remunerative routes by bringing about significant organisational reforms. "The railways will need to phase out subsidies in passenger fares while re-balancing freight tariffs to economically competitive levels. They will also need to re-orient themselves to a much more customer focused approach in the provision of both freight and passenger services."
Highlighting the failure of the telecom operators to reach out to the rural sector, the Survey has said that there is an urgent need to deliver telecom services to rural areas more rapidly. Of the 6 lakh villages in the country only 4 lakh have got a phone connection with none of the private sector operators meeting their obligations to roll out village public phones. The other key issue for the future, according to the ES, will be the evolution of a regulatory regime that recognises convergence of telecom, IT and media.
Improvement in the transport infrastructure is another focus area according to the Survey. It has said that transport infrastructure will be essential for the achievement of accelerated growth of GDP.
The Survey has also pointed out that the current structure of air traffic and forecasts indicates that unless the major international airports are significantly upgraded, capacity constraints will inhibit the growth of air traffic and hence of tourism. "As these airports are privatised, the regulatory system will also need restructuring," the Survey has said.
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Who will do it?
Do we have too many departments responsible for infrastructure investments? And is it only the government's responsibility to ensure spending on infrastructure?
In the current fiscal, the government planned to spend Rs 10,000 crore for the last-mile projects. But the Planning Commission