States vote for infrastructure, but it's no-go at the Centre

For three terms, the Congress under Chief Minister Sheila Dikshit has been voted to power in Delhi. Despite the corruption charges in the current term, there is no denying the fact that this feat was largely possible because of the improvement in the city’s infrastructure. Moving out of the capital city, to Bihar, Chief Minister Nitish Kumar, too, is perceived to be back for a second term due to his development agenda, one of its manifestations being creation of a good road infrastructure.

The UPA government at the Centre is into its second term, too, but by contrast, its achievement on infrastructure has been largely dismal. Be it the transport infrastructure — roads and railways — or the energy sector, the picture is largely static. In fact, the government’s Economic Survey for 2010-11 shows the pace of national highways and border roads construction had slowed from a high of almost 90 per cent growth in 2007-08 to about 13 per cent in 2009-10.

According to the figures of the Ministry of Road Transport and Highways, 1,825 km were constructed in 2010-11, down from 2,738 km built in 2009-10.

Though Road Transport and Highways Minister C P Joshi says this is due to the lag effect of the economic slowdown, since road construction takes three years and project award had suffered during 2008-09, the story in railways is not much different. Not only did former railway minister Mamata Banerjee undo the private investment initiatives taken under the first UPA regime, the railways under her failed to meet its freight loading targets for 2009-10 and 2010-11.

The railways carried 887 million tonne (MT) cargo in 2009-10, down from a revised estimate of 890 MT; and 922 MT in 2010-11, down from a revised estimate of 924 MT. Besides, the ratio of railways spending to its earnings, an indicator of its efficiency, has risen from 90.5 per cent to 95.3 per cent in 2009-10, though the revised estimates show it could improve to 92 per cent in 2010-11. Banerjee took a plea that this was primarily due to arrears of the Sixth Pay Commission and an unprecedented 97 per cent increase in staff and pension bills.

On the power front, capacity addition has been faster. There has been an increase of about 32 per cent in installed generation capacity till April 2011, over 132,329 Mw at the beginning of Eleventh Plan period in 2007. A record 15,795 Mw was added in 2010-11. Nonetheless, unlike the Tenth Plan period when there was a 50 per cent shortfall in capacity addition target of 41,110 Mw, the challenge in the sector this time is of actual generation, considering that coal availability has become a big issue. There are not only environmental challenges in enhancing production but the demand itself has shot up considerably.

According to the power ministry’s estimate, 5,593 Mw capacity commissioned in 2009-10 will operate at 42 per cent plant load factor. Another 6,911 Mw commissioned in 2010-11 and 10,070 Mw commissioned in 2011-12 will have to depend on imported coal due to non-availability of domestic coal. Production of Coal India Ltd, the primary producer of coal in the country, has stagnated at 431 MT in 2010-11. The shortage is expected to shoot up to 112 MT by March 2012.

Though the government sees a requirement of $1-trillion (Rs 45 lakh crore) investment in the Twelfth Five-Year Plan beginning 2012, against $514.04 billion in the Eleventh Plan and $217.86 billion in the Tenth Plan period, problems of fuel, land acquisition and the environment pose a challenge to viability of investment in infrastructure.