Poor Infrastructure Impedes Growth: Study

The latest World Bank study on India says the country's deficiencies in transport, ports, power and telecommunications are the chief impediments to its growth and export competitiveness.

India's major ports are over-crowded, poorly-equipped and inefficiently laid out, says the study.

Eleven ports in the country are used beyond their capacity with average utilisation rates ranging from 118 to 135 per cent, against the international rate of 55 per cent to 65 per cent.

Vessels entering Bombay and Calcutta ports take five to six days to turn around, against six to 12 hours at most ports in the region. Long delays and inadequate port facilities have induced carriers to charge higher freight rates from Indian ports than from other Asian ports.

 

Demand forecasts by the Asian Development Bank suggest India will need additional port capacities of roughly 200 million tonnes by the turn of the century. Obsolete equipment, bureaucracy, poor management and low labour productivity are the other problems faced by importers and exporters.

A recent World Bank study compared Indian port handing costs to those in some other countries and, not counting the loss of potential exports, estimated the comparative cost disadvantage at $80 per container for exporters and $190 per container for importers.

The study says that only 20 per cent of the paved roads in India are estimated to be in good condition, compared with 70 per cent in Korea and 50 per cent in Thailand.

The excessive traffic worsens road conditions and takes a further economic toll in terms of vehicle operating costs and delays.

Road travel now accounts for about 80 per cent of India's passenger traffic.

This is expected to rise to 87 per cent by the year 2000.

Despite the problems associated with the road system, the railways has been losing freight market share to road transport, though the country has a relatively high length of railways per capita and per square km.

The World Bank study says that sending a container from Madras to north India by road takes about a quarter of the time taken by rail.

However, freight transport demand is expected to grow 8-10 per cent per annum in the medium term and a massive investment is needed in this area to keep pace with the demand forecasts.

On the telecommunications front, India is underperforming to comparable countries, especially with regard to telephone density and line faults, says the study.

The study says the power deficit in the country is chronic and the situation is deteriorating rapidly. The overall energy deficit has risen from 9 per cent to about 14 per cent, with the peak deficit getting close to 30 per cent. Bridging the power shortage is estimated to cost at least $2-3 billion a year.

This sector is unable to expand the country's power supply capacity at a pace commensurate with the growing demand.

For the ninth plan, the government has estimated the additional capacity required to bridge the power deficit at 57,000 mw. This means the country would need investments worth over $100 billion in generation, transmission and distribution.