Day 14 – Q 1.Raising resources, ensuring efficient inter-ministerial coordination and minimising bureaucratic delays are the most pressing challenges facing the infrastructure sector in India. Elucidate. What suggestions would you give to tackle these challenges?

1. Raising resources, ensuring efficient inter-ministerial coordination and minimising bureaucratic delays are the most pressing challenges facing the infrastructure sector in India. Elucidate. What suggestions would you give to tackle these challenges? 

संसाधन जुटाना, कुशल अंतर–मंत्रालय समन्वय सुनिश्चित करना और नौकरशाही विलंब को कम करना भारत में बुनियादी ढांचा क्षेत्र के सामने सबसे प्रमुख चुनौतियां हैं। स्पष्ट करें। इन चुनौतियों से निपटने के लिए आप क्या सुझाव देंगे?

Introduction:

While India is the fourth largest economy in the world, a key factor obstructing its growth and development is the lack of world class infrastructure. Estimates suggest that this lack of adequate infrastructure reduces India’s GDP growth by 1-2 per cent every year. Good social and physical infrastructure facilities are crucial for rapid economic growth, rapid human development, and poverty reduction.

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Most pressing challenges facing the infrastructure sector in India.

Raising Resources poses Challenge to Infrastructure Sector in India

Physical infrastructure 

• It has a direct impact on the growth and overall development of an economy. The goals of inclusive growth and 9 per cent growth in GDP can be achieved only if India’s infrastructure deficit is overcome. Infrastructure development will also help create a better investment climate in India. To develop infrastructure in the country, the government is expected to review issues of budgetary allocation, tariff policy, fiscal incentives, private sector participation, and public-private partnerships (PPPs).
• There are many issues that need to be addressed in different infrastructural fields. To begin with, the gap between electricity production and demand is affecting both manufacturing and overall growth. Another concern is the transport sector; while road transport is the backbone of the Indian transport infrastructure, it is inadequate in terms of quality, quantity, and connectivity. Furthermore, civil aviation and ports desperately need modernisation. It is expected that the public sector will continue to play an important role in building transport infrastructure. However, the resources needed are much larger than what the public sector can provide.

Social Infrastructure

• Education and health are the main constituents of social infrastructure. Many studies document the contribution of education and health to economic development. Therefore, it can be surmised that investment in human capital through education, training, health, and medical facilities yields additional output and economic returns.
• India has a vast population of young people. Even after 66 years of independence, a surprisingly large proportion of our youngsters are not getting sufficient education or vocational training. On the one hand, this keeps a large number of them in poverty and misery for lack of productive skills; on the other hand, it reduces the rate of economic growth because of the lack of enough sufficiently skilled workers in many areas, which reduces our international competitiveness. Education sector characteristics measured by enrolment, literacy rate, pupil-teacher ratio, public spending, etc., to take stock of the current situation in India and compare it with international standards and achievements. First, we look at adult literacy rates. Even in 2011, India’s adult literacy rate (only 63 per cent) was way behind that of China, East Asia, and BRCS countries (about 94 per cent) and developed countries (98 percent). India’s literacy rate gap with China and East Asia has stayed nearly the same for the last 10 years.
• Despite some improvements over the last decade or so, India’s healthcare infrastructure is woefully inadequate and has not kept pace with the country’s requirements. While India has several centers of excellence in healthcare delivery, these facilities are limited in their ability to drive healthcare standards because of the poor condition of the infrastructure in the vast majority of the country. This is reflected in the numbers of physicians per 1,000 persons, which has hardly risen from 2,000 and remains rather low at only 0.65 compared to 1.8 in China, 2.2 in BRCS and 2.8 in developed countries

Lack of efficient inter-ministerial coordination impedes infrastructure Sector in India.

• The Land Ports Authority of India (LPAI), under the Home Ministry, completed the Indian side of Raxaul (Bihar)-Birgunj and Jogbani (Bihar)-Biratnagar ICPs more than a year ago, but the External Affairs Ministry-funded mirror facility on the Nepalese side is yet to be completed. And till the entire project is ready, the ICPs are of little use as a land port cannot operate in isolation.
• Proposed by the Atal Bihari Vajpayee government, the ICP projects became a non-starter from day one due to inter-ministerial issues.
• The creation of LPAI may have brought in some structure on the designing aspect, but the operational problems continued due to involvement of at least four ministries — Home, Commerce, Finance and Railways — and multiple agencies within the same ministry. For example, immigration authorities, though under the Home Ministry, have fewer meeting points with LPAI. A proposal for building a passenger terminal, an additional parking space and an accommodation of security forces at Petrapole have been supposedly making rounds at the Home Ministry for a year.

Bureaucratic delays is challenge for  infrastructure sector in India

• Bureaucratic delays and cost overruns have significant and far-reaching implications. The short-term inconvenience and disruption of slow under-construction projects aside, it means that public goods take significantly longer to achieve the impact they were planned for.
• Example: In one instance, the original cost of a railway track conversion project on the Bankura-Damodar stretch in West Bengal has increased more than 20 times from 111.9 crore to 2,371.85 crore since 1998, when it was first approved because delayed regulatory approvals. Similarly, According to Ministry of Statistics and Programme Implementation data, 24 projects undertaken by state-run hydrocarbon explorer and producer Oil and Natural Gas Corp. Ltd (ONGC) have been delayed.

Suggestions to tackle these challenges

For Energy Sector: Oil, natural gas, electricity and coal may be brought under GST to enable input tax credit. Have the same GST rate for all forms of energy to enable a level playing field. All form of subsidies should be provided as functional subsidies to end-consumers to empower them to choose the energy form most suitable and economical to them.

Increase connectivity by expanding the road Network: Bharatmala Pariyojana PhaseI:complete 24,800-km by 2021-22.10. Special Accelerated Road Development Programme for the North-Eastern region (SARDP-NE), Phase ‘A’: improve about 4,099 km in the North-East. Chardham Mahamarg Vikas Pariyojna improves the implementation capacity of states’/ UTs’ public work departments (PWDs) through institutional strengthening and training.

Broadband connectivity: A modified strategy for expediting the pace of implementation of the BharatNet project was approved on July 19, 2017. As part of the modified strategy, the remaining 1.50,000 GPs are to be connected in Phase-II through a state led model.Digital literacy needs special focus at the school/college levels. The National Digital Literacy Mission should focus on introducing digital literacy at the primary school level in all government schools for basic content and in higher classes and colleges for advanced content.

Education sector:  Government spending on education as a whole should be increased to at least 6 per cent of GDP by 2022. At present, allocations to the education sector by the center and states remains close to 3 per cent of GDP, while according to the World Bank, the world average in this regard is 4.7 per cent of GDP. Ensure effective coordination of roles of different higher education regulators, such as the UGC, All India Council for Technical Education (AICTE) and National Council for Teacher Education (NCTE), and restructure or merge these where needed.

Health Sector: Public funding on health should be increased to at least 2.5 per cent of GDP as envisaged in the National Health Policy, 2017.Create an environment, through appropriate policy measures, that encourages healthy choices and behaviours. Institute a public health and management cadre in states.

Conclusion

In spite of some improvements in infrastructure in recent years, India still ranks 89 in basic infrastructure as per the Global Competition Report 2011-12. This indicates poor development compared to other countries of the world. The poor state of infrastructure, stretched to limits by the growing population and increasing regional and rural-urban disparities, implies that major improvement in physical and social infrastructure is absolutely essential to sustain further progress and high rate of economic growth.