DMPQ- What are the key challenge of Infrastructure development in India ?

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. Despite the efforts of the government as highlighted above infrastructural development  still has a few challenges as mentioned below:

  • The World Economic Forum has ranked India in terms of infrastructure as 89 among 139 countries. Countries such as China have a rank of 50 and Brazil 62. This implies  that our infrastructure is viewed as grossly inadequate by global standards.
  • Raising long-term resources would require reforms in banking, insurance and pension funds as that is where long-term resources are available.
  • Further, long-term resources for infrastructure can also come through foreign investment (like in case of China) and government would have to further liberalize  its policies to attract foreign investment in India.
  • The PPP model is appreciable but cannot substitute government spending given the huge magnitude of resources required. It can at best play a supportive role in  infrastructure development.
  • India’s metro infrastructure of Delhi, Mumbai and Chennai are virtually collapsing despite efforts of the state government. Even the major urban centres are having  severe infrastructural constraints, despite having the Jawaharlal Nehru National  Urban Renewal Mission (JNNURM).
  • That is, to say the government cannot absolve itself of its responsibilities of infrastructure development.

The twin challenges are as follows:

  • How would the government raise resources given the budgetary constraints? The compulsions of the Fiscal Responsibility and Budget Management Act (FRBMA) would  not only allow it to raise expenditure to keep the deficit level under check. The government  has a legacy of an inefficient spender in the economy with as many as three hundred  government projects delayed by over eight years with a Cost over-run of ₹ 49,000 crores.
  • How to make the government an efficient spender in the economy? There are myriads issues of land acquisition, inter-ministerial coordination and bureaucratic delays which is  inbuilt in any government functioning. The other is that we have to learn from the Chinese experience in infrastructure de­ velopment. They have kept the scale of existing ideas, instructive and unconventional,  something as unbelievable.

 

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