India's infrastructure woes continue

Tue, 7 Jun Pre-Open

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If quizzed on what is the biggest problem that India currently faces, the unanimous response will be infrastructure. Indeed, poor state of infrastructure has been the bane of India's economic development. Therefore, what has been commendable is the pace at which India's economy has grown over the past few years despite various infrastructural bottlenecks. However, while the going so far has been good, India cannot afford to rest on its laurels and will have to display a bit more willpower in ramping up its state of infrastructure. Especially if it wants to sustain growth in GDP at 9% plus.

The progress so far has been far from satisfactory. Take the power sector for instance. According to the Power Minister, India will miss its capacity addition aim for the five-year plan period until the end of March 2012 by 17%. The reasons are many and include problems of land acquisition, issues relating to coal supply and environmental clearances. Coal shortage has been a big problem for India's power sector despite the country having one of the world's largest coal reserves. And one of the reasons for the same has been the standoff with the Ministry of Environment with respect to undertaking coal mining projects in forest areas. Indeed, such shortages do not augur well for an economy which is growing at a brisk pace and is exhibiting a ravenous appetite for energy.

The power sector is not the only one where hurdles lie. The government has not been able to deliver on its promises of building roads and highways too. The same problems affecting the power sector are a deterrent to the building of roads as well. The most common problem for all these infrastructure projects has been land acquisition as there is a great deal of murkiness as far as land rights are concerned. Land reforms have also not really taken off largely due to vested interests of politicians, developers and the like.

In the long term, there is huge scope and potential for the growth of power and roads as the demand in India for energy and goods is immense. But how the Indian government chooses to tackle the same will set the course for India's growth in the coming years. And if the government decides to do nothing significant about it, then one will have to wait and see how long the country can continue to sustain the buoyancy of its current economic growth.