Rs 15,000 Crore Investments In Core Sector Needed

A massive Rs 15,000 crore investment over the next decade in the infrastructure sector to sustain the annual economic growth of seven to eight per cent.

A government study, giving the long-term dimension of this massive problem, said infrastructure development held the key to the country's future development.

The study, prepared in the wake of the ongoing 10-day visit of a high-power delegation led by cabinet secretary TSR Subramanian for scouting about $15 billion of investment from the US into the infrastructure sector.

It pointed out that the country's per capital electricity consumption was less than one tenth of the global average and penetration ratio of telephone was still low at 1.5 per 100 people as compared with the global average of 10 per 100.

Though infrastructure was a major bottleneck, its development at the same time could be seen as presenting enormous opportunities for investors, particularly foreign direct investors, it said.

Aware of this potential, the government has taken certain initiatives to attract foreign investment, particularly in the power sector, allowing 100 per cent foreign participation.

The total installed capacity of power generation is 83,288 mw, which has been achieved through sustained power sector development since independence. But, over the next 10 years, the minimum capacity addition needed was estimated at around 83,000 mw. At an average cost of $one million per mw, it calls for a massive investment of at least $83 billion. The transmission and distribution will require an additional $60 billion, the study says. But since the opening up of the power sector as part of the liberalisation process which started in 1991, as many as 82 private investment projects with total installed capacity of 38,400 mw have been given clearance in principle.

Twenty projects, amounting to 11,878 mw, have received techno-economic clearance. Construction has started at 17 projects with a total capacity of 4,500 mw. Generating units in seven projects have been commissioned and are in operation.

In the oil and natural gas sector, India plans to increase refining capacity to 131 million tonnes per annum by 2002 from the present capacity of 80 million tonnes per annum. This has to be stepped up to 170 million tonnes per annum by 2007, the study said.This capacity expansion will require an investment of $10 to 15 billion in the next 10 to 15 years.

Already, grassroot refinery projects, totalling 27 million tonnes per annum capacity, are underway.

Besides, product pipelines are also being set up at several places in the country like Kochi-Karur, Deogarh-Miraj, Mangalore-Bangalore Bina-Jhansi-Kanpur, Paradip-Ranchi, Vadinar-Kandla, Chennai-

Madurai, Koyali-Sidhpur, Sultanpur-Allahabad, Bhatinda-Jalandhar, Jalandhar-Udhampur and Mathura-Kanpur.