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INFRASTRUCTURE
DEVELOPMENT AND POLICY
IN INDIA
Presentation By,
Rajasekar,
Gopinath,
Karthik,
Raja,
Sureshbabu.
FW0709 FIN...
AGENDA
 Introduction
 Broad areas of infrastructure
 Current states of India’s infrastructure
 Factors impeding develo...
INTRODUCTION
 Infrastructure in India generally refers to the elementary
supporting factors responsible for the entire fr...
 Infrastructure development is a major constraint on the
industrial growth in India. India is aiming to achieve 10-per ce...
BROAD AREAS OF INFRASTRUCTUREBROAD AREAS OF INFRASTRUCTURE
 Physical infrastructure (Economic)
• Agro – specific Infrastr...
CURRENT STATE OF INDIA’S
INFRASTRUCTURE
 Poor road conditions and electricity shortage.
 Over the past decade, electrici...
FACTORS IMPEDING DEVELOPMENT OFFACTORS IMPEDING DEVELOPMENT OF
INDIA’S INFRASTRUCTUREINDIA’S INFRASTRUCTURE
 Poor judicia...
DEVELOPMENT STATUS OF
INFRASTRUCTURE
 Weighted value for major infrastructures by CMIE, Transport
facilities – 26; Energy...
CONTINUED…CONTINUED…
 On the basis of composite development index of CMIE relating
to infrastructure development of 15 ma...
DEVELOPMENT OF POWER SECTORDEVELOPMENT OF POWER SECTOR
 Total electricity generation capacity in India is 101500 MW out
o...
POWER SECTOR ACTSPOWER SECTOR ACTS
 Electricity generation, transmission and distribution in the
Country is primarily gov...
DEVELOPMENT OF PORTS SECTORDEVELOPMENT OF PORTS SECTOR
 India has a vast coast line to the tune of 6000 Kms and there are...
 Indian road network is around 3 million KM length and third
largest in the World.
 The National Highways in the Country...
NEED FOR CHANGENEED FOR CHANGE
 The areas to be tackled on priority is,
• Improving the existing plants productivity.
• R...
CONTINUED…CONTINUED…
Potential (MW) Achieved (MW)
Wind Power 45000 1267
Biomass (Bagasse) co-generation 3500 273
Small Hyd...
INDIA & CHINAINDIA & CHINA
 China is to manufacturing, India is to services.
 China plowed its huge reservoir of domesti...
 Improved modern water supply and urban sanitation facilities.
 Lagging computer infrastructure and computer literacy.
...
INDIA VS CHINA
 Raw materials.
 Education.
 Electricity.
 Water.
 Pollution.
Slide 18 of 26 - Raja
CRITICAL STEPS IN MAKING
INFRASTRUCTURE
 Strong Government with clear direction.
 Consistent and thoughtful marketing ef...
PRIVATE DEVELOPMENT OF
INFRASTRUCTURE
 Privatization of public owned industries.
 Private investment in highways and exp...
1996 2006
024681012141618
PRIVATE PARTICIPATION IN
INFRASTRUCTURE (US$ billion)
BRAZIL
CHINA
INDIA
Source: World
Bank
Slid...
EXPECTED PUBLIC-PRIVATE SECTOREXPECTED PUBLIC-PRIVATE SECTOR
INVESTMENT CONTRIBUTION (2007-12)INVESTMENT CONTRIBUTION (200...
GOVT. CONTINUED TO FOCUS ONGOVT. CONTINUED TO FOCUS ON
INFRASTRUCTURE DEVELOPMENTINFRASTRUCTURE DEVELOPMENT
 Facilitating...
CONTINUED…CONTINUED…
 Supportive policies in Telecom sector.
 Jawaharlal Nehru National Urban Renewal Mission.
 While s...
CONCLUSION
 The pace at which the government is contracting new road
contracts to private investors is phenomenal.
 Indi...
Infrastructure development - GEEB
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Infrastructure development - GEEB

  1. 1. INFRASTRUCTURE DEVELOPMENT AND POLICY IN INDIA Presentation By, Rajasekar, Gopinath, Karthik, Raja, Sureshbabu. FW0709 FINANCE 03 GEEB
  2. 2. AGENDA  Introduction  Broad areas of infrastructure  Current states of India’s infrastructure  Factors impeding development of India’s infrastructure  Development of infrastructure  India and China  Privatization  Govt. continued to focus on infrastructure development  Conclusion Slide 2 of 26 - Karthik
  3. 3. INTRODUCTION  Infrastructure in India generally refers to the elementary supporting factors responsible for the entire frame of India.  The infrastructure definition says that anything that forms the core of the functioning of any country is infrastructure.  India being the seventh-largest country in the world has maintained an infrastructure management that has enabled India to reach new heights.  Infrastructure development includes economic (energy, power, telecom, transport, InfoTech, finance, etc) and social (education and health issues) infrastructure development. Slide 3 of 26 - Karthik
  4. 4.  Infrastructure development is a major constraint on the industrial growth in India. India is aiming to achieve 10-per cent annual GDP growth by the year 2011-12, but the country needed over $300 billion to upgrade its infrastructure over the next five years.  The country needed double-digit growth in manufacturing and services sectors in the next five years, and had to double farm output, if it was to meet the target.  The Indian economy has grown at an average eight per cent in the past three years, and a 10 per cent annual GDP growth is difficult to achieve unless the country improves its infrastructure. CONTINUED… Slide 4 of 26 - Karthik
  5. 5. BROAD AREAS OF INFRASTRUCTUREBROAD AREAS OF INFRASTRUCTURE  Physical infrastructure (Economic) • Agro – specific Infrastructure • Transport & Communication Infrastructure • Power Infrastructure  Financial Infrastructure  Social Infrastructure • Education Infrastructure • Health Infrastructure Slide 5 of 26 - Karthik
  6. 6. CURRENT STATE OF INDIA’S INFRASTRUCTURE  Poor road conditions and electricity shortage.  Over the past decade, electricity generation as grown up a compound annual rate of 5.5%, but the demand grown even faster to 12.1%.  Poor road conditions drastically affects the business transaction across the country and need the overall repair.  The international trade in India is adversely affected by inefficient ports. Slide 6 of 26 - Gopinath
  7. 7. FACTORS IMPEDING DEVELOPMENT OFFACTORS IMPEDING DEVELOPMENT OF INDIA’S INFRASTRUCTUREINDIA’S INFRASTRUCTURE  Poor judicial system.  Acquiring land in India is not easy.  India spent just $31 billion or 6% of GDP for infrastructure development.  Corruption.  Black money. Slide 7 of 26 - Gopinath
  8. 8. DEVELOPMENT STATUS OF INFRASTRUCTURE  Weighted value for major infrastructures by CMIE, Transport facilities – 26; Energy – 24; Irrigation – 20; Banking facilities – 12; Communication facilities – 6; Education facilities – 6; Health facilities – 6;  Development indicators related to major infrastructure to form Composite Development Index (CDI), Surfaced roads per 100 sq.km. area, unsurfaced roads per 100 sq.km. area, railway route length per 100 sq.km. area, percentage of villages electrified, gross cropped area, bank branches per lakh population, post offices per lakh population, telephone lines per 100 persons, primary schools per lakh population, primary health centers per lakh population and hospital beds per lakh population. Slide 8 of 26 - Gopinath
  9. 9. CONTINUED…CONTINUED…  On the basis of composite development index of CMIE relating to infrastructure development of 15 major states of India in the early 1990s, Orissa’s rank was found to be 12 in the descending order. The CDI value of Orissa was 101.45 and this was just above the national average.  There were only three states namely Bihar, Rajasthan and Madhya Pradesh, which were infrastructurally most underdeveloped occupying the last three positions in the descending order. Slide 9 of 26 - Gopinath
  10. 10. DEVELOPMENT OF POWER SECTORDEVELOPMENT OF POWER SECTOR  Total electricity generation capacity in India is 101500 MW out of which 72000 MW is thermal, 24500 MW is Hydel, 2800 MW is nuclear and the rest is renewable. Out of this generation around 30 is from Central Sector and around 62 from State Govt. and the rest is by private sector generation. The approximate energy consumption pattern in the country is as below: Domestic : 21% Industry : 35 % Agriculture : 31 % Commercial : 7 % Slide 10 of 26 - Gopinath
  11. 11. POWER SECTOR ACTSPOWER SECTOR ACTS  Electricity generation, transmission and distribution in the Country is primarily governed by Indian Electricity Act, 1910, Electricity (Supply) Act, 1948.  Other legislation, Water Act, 1974, Air Act, 1981, Forest (Conservation) Act, 1980, wild Life Act, 1972, Environment (Protection) Act, 1986. Factories (Amendment) Act, 1988, Town and Country Planning Act, 1952 etc. Slide 11 of 26 - Rajasekar
  12. 12. DEVELOPMENT OF PORTS SECTORDEVELOPMENT OF PORTS SECTOR  India has a vast coast line to the tune of 6000 Kms and there are 11 major ports and 39 minor ports in the country classified based on traffic handled.  After liberalization India has embarked on privatization Ports on priority either component wise or through Joint Venture route with foreign Ports.  Principal legislation's governing Indian Ports are the Indian ports Act, 1908 and the Major Ports Trust Act, 1963.  The activities and development of Ports are governed by Environment (Protection) Act, 1986. Slide 12 of 26 - Rajasekar
  13. 13.  Indian road network is around 3 million KM length and third largest in the World.  The National Highways in the Country are governed by National Highway Act, 1956 which has been amended in June, 1995 after liberalization. OPEN AREA NORMAL RANGE National and State Highways 45 30-60 Major district roads 25 25-30 Other district roads 15 15-25 Village roads 12 12-18   DEVELOPMENT OF ROAD SECTORDEVELOPMENT OF ROAD SECTOR Slide 13 of 26 - Rajasekar
  14. 14. NEED FOR CHANGENEED FOR CHANGE  The areas to be tackled on priority is, • Improving the existing plants productivity. • Reduction transmission and distribution losses both technical and non-technical. • A strategy on demand side management with both command and control as well as economic incentive mix.    It is estimated there is good potential of renewable energy in India which can be economically exploited with little shift in policies and implementation. Slide 14 of 26 - Rajasekar
  15. 15. CONTINUED…CONTINUED… Potential (MW) Achieved (MW) Wind Power 45000 1267 Biomass (Bagasse) co-generation 3500 273 Small Hydro Power 15000 1341 Biomass gasification 16000 1700 Power from solid waste 35 15.2 Solar Power 3 times to total energy demand of Negligible the country (500,000 Tera KWH) Slide 15 of 26 - Rajasekar
  16. 16. INDIA & CHINAINDIA & CHINA  China is to manufacturing, India is to services.  China plowed its huge reservoir of domestic saving (about 40% of GDP) into best infrastructure.  Largest recipient of FDI in the world.  India suffers in comparison basically from having none of the above.  India has 24% national saving rate, a little more than half that of China.  Internally generated funds is less to plow back into infrastructure in India. Slide 16 of 26 - Raja
  17. 17.  Improved modern water supply and urban sanitation facilities.  Lagging computer infrastructure and computer literacy.  Cellular users: 28 million in India – 270 million in China.  Internet users: 16 million in India – 78 million in China.  Iron and Steel production: 28mn tons in India – 225mn tons in China.  55% of world cement is used by China.  Oil production: 36mn tons in India – 160mn tons in China. -2003 report INFRASTRUCTURE COMPARATIVE FACTS Slide 17 of 26 - Raja
  18. 18. INDIA VS CHINA  Raw materials.  Education.  Electricity.  Water.  Pollution. Slide 18 of 26 - Raja
  19. 19. CRITICAL STEPS IN MAKING INFRASTRUCTURE  Strong Government with clear direction.  Consistent and thoughtful marketing effort.  Bringing in the money (FDI & Private participation).  Creation of zones and infrastructure for businesses.  Business-above-all attitude. Slide 19 of 26 - Raja
  20. 20. PRIVATE DEVELOPMENT OF INFRASTRUCTURE  Privatization of public owned industries.  Private investment in highways and expressways.  Built – Operate – Transfer (BOT). Highway/Expressway Length(km) Total Cost($ million) Cost/km($ million) Mumbai-Pune 95 [a] 350 [a] 3.68 Mysore-Bangalore 111 [b] 630 [b] 5.67 Jalandhar-Amritsar 49 [c] 59 [c] 1.21 Chandigarh-Ambala 35 [c] 63 [c] 1.8 [a] Source: SPG Media, 2006, [b] Source: IANS, 2006, [c] Source: NHAI, 2006 Slide 20 of 26 - Raja
  21. 21. 1996 2006 024681012141618 PRIVATE PARTICIPATION IN INFRASTRUCTURE (US$ billion) BRAZIL CHINA INDIA Source: World Bank Slide 21 of 26 - Sureshbabu
  22. 22. EXPECTED PUBLIC-PRIVATE SECTOREXPECTED PUBLIC-PRIVATE SECTOR INVESTMENT CONTRIBUTION (2007-12)INVESTMENT CONTRIBUTION (2007-12)020406080100 Inpercent Electricity Roads Telecom Railways Irrigation Watersupply& Sanitation Ports Airports Storage Gas Total Public Private Source: Planning Commission Slide 22 of 26 - Sureshbabu
  23. 23. GOVT. CONTINUED TO FOCUS ONGOVT. CONTINUED TO FOCUS ON INFRASTRUCTURE DEVELOPMENTINFRASTRUCTURE DEVELOPMENT  Facilitating the entry of private enterprises.  Number of projects envisaged for the Eleventh Five Year Plan.  Task force has been constituted under the Chairmanship of Ministry of power.  Improved resource management, through increased wagon load, faster turn around time and a more rational pricing policy in Railways.  Liberalization in Civil Aviation sector.  An investment of Rs. 3,14,152 crore has been envisaged for the roads and bridges sector during the Eleventh Five Year Plan. Slide 23 of 26 - Sureshbabu
  24. 24. CONTINUED…CONTINUED…  Supportive policies in Telecom sector.  Jawaharlal Nehru National Urban Renewal Mission.  While sanctioning the projects, highest priority has been accorded to sectors that directly benefit common man and urban poor namely, water supply, sanitation and storm water drainage.  A total investment of Rs. 3, 35,350 crore have been envisaged by the Mission city for the development of urban services.  The investment in physical infrastructure alone has been estimated to be about Rs. 2,002 thousand crore (at 2006-07 prices). Slide 24 of 26 - Sureshbabu
  25. 25. CONCLUSION  The pace at which the government is contracting new road contracts to private investors is phenomenal.  India’s telecom industry is highly developed. Cell phone services are available throughout India, even in the far flunked rural villages.  The power and aviation sectors have shown similar if not better signs of development. The power providers in many states of India are private vendors.  If the government continues to privately contract the infrastructural projects and encourage investment in this long held public sector, then India can expect to continue its phenomenal growth. Slide 25 of 26 - Sureshbabu

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