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Time to focus on infrastructure
Wed, 24 Jul Pre-Open

Last week was eventful for Indian economy as the Government raised Foreign Direct Investment limits for around 12 sectors. As the Government is struggling with slowing economic growth and twin deficits, it seems to focusing on infrastructure to revive growth. And hence, looking for ways to attract more foreign capital in Indian economy. Despite having a huge potential, India is lagging behind the global peers. One of the main reasons behind this is lack of proper infrastructure in the country.

As an article in Business Standard suggests, the statistics on the progress of Infrastructure plans paints a very dismal picture. As per the data, around 49% the mega infrastructure projects which are worth a minimum of Rs 10 bn are facing delays in implementation. Such delays have led a significant increase in the costs of these projects, almost by around 17.7%.

This report raises a very interesting point. It is one thing to make plans and frame policies. Quite another to implement. The victim of these delays have been some of the strategic sectors like steel, telecom, power, fertilizer, railways, road , highways and coal sector. As such, despite much potential, India is lagging behind. At the same time, other countries like China have outpaced us, taking a significant lead on infrastructure front. Infrastructure is a key constituent of GDP. And hence, a callous attitude to this vital componenent directly hits the country's growth rate.

The key reasons behind the delay in the projects are land acquisition issues, bureaucratic delays ,complex processes and lack of clarity in the policies. Unless these issues are tackled, it won't help to just plan mega projects. We hope the Government is listening.

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