Poor infrastructure could hinder growth of major sectors: Survey

Irregular power supply and poor roads are the major infrastructural hurdles faced by automotive and auto components, information technology, textile, cement and fertiliser industries, the growth driving sectors of Tamil Nadu, according to a business outlook survey conducted by the Confederation of Indian Industry southern zone.

CII had undertaken the survey to analyse the performance of the top five sectors of the southern region States during October 2005 - March 2006 and provide an outlook for the first six months of the financial year 2006-07 and identify issues and concerns.

The key sectors as per the contribution to the gross state domestic product which stood at an impressive Rs 1,88,921 crore in 2004-2005, identified in Tamil Nadu are automotive and auto components, information technology textile industry, cement industry and chemical and fertiliser industry.

"Tamil Nadu has registered an impressive performance in the Information Technology industry by increasing its revenue and the overseas billing. The export performance of textiles and the auto component industry will continue to boost the industry growth," a CII press statement said.

However, the information technology sector is reeling under problems like erratic power supply and the poor quality of roads. The industry urges the government to abolish fringe benefit tax (FBT) and appeals to the educational institutions to create curriculum that would meet the industry requirements.

It is interesting to note that according the interim budget of Tamil Nadu 2006-07, the capital outlay of the Tamil Nadu Electricity Board will be scaled up to Rs 1,798 crore from Rs 1,495 crore for the last year, to improve distribution.

The outlay for improving roads and bridges has also been increased and a provision of Rs 3,019.84 crore has been made in the revised estimates of 2005-06, from Rs 562.52 crore in 2001-02.

The budget statement further said that the government has taken up works for renewal, widening and strengthening of 52,676 kilometres of road network and construction of 993 new bridges at a cost of Rs 6,398 crore during 2001-06.

According to the industry leaders, the textile industry is expected to perform well during April 2006 - September 2006. However, the industry faces severe infrastructural problems like unreliable power supply, poor transportation facilities combined with poor quality of roads, scarcity of water, and ineffective waste disposal facilities. In this context, improving the infrastructure is vital to the continued growth of the sector, the survey points out.

The automotive industry in Tamil Nadu has performed quite well during October 2005 - March 2006. Inadequate power supply and road and port infrastructure are the major bottlenecks. To meet the infrastructure needs of the industry, the government is urged to build an auto and auto component parks in the state, added the CII statement.

The industry has expressed its concern over the rise in the input cost, cost of coal and a fluctuating oil price. The industry demands restructuring of the tax structure for the sector and a reduction in excise duty.