Indian infrastructure set for a shot in the arm
Infrastructure in India has long been thought to offer great promise but little reward, the government is hoping to change perceptions
Infrastructure in India has long been thought to offer great promise but little reward, the government is hoping to change perceptions
India’s infrastructure has long been considered an area of massive potential for investors, but one that never quite seems to bear the promised fruits. Due to the bureaucratic spider web that exists throughout Indian decision-making, major projects often sit on the drawing board for years without any sign of concrete progress.
On Wednesday, however, Prime Minister Manmohan Singh was eager to kick-start a new round of infrastructure investment, announcing at a meeting in New Delhi his intention to fast-track the commissioning of new airports, highways, railways and ports.
The meeting, which included the top officials and ministers from the transport, construction and energy ministries, resulted in an initial announcement of PPP for a minimum of 20 new airports, 9,500km of new highways, a Rs 20,000 crore investment in Mumbai’s rail corridor, investment of Rs 35,000 crore in sea ports, as well as two new large east coast ports.
India has seen growth slow considerably in the last year, with GDP dropping to 5.3 percent for the first three months of 2012, its lowest level in nine years.
Singh is determined to get India back on track, declaring, “”We as a government are committed to taking the necessary measures to reverse the present situation and revive and revitalise India’s growth story.”
He sees infrastructure as an important catalyst for this, “In the short term, development of infrastructure will boost investment rates across the economy. In the long run, it will remove the supply constraints that affect economic activity in agriculture, industry and trade.”
Whether investors believe the bureaucratic troubles of the past are gone remains to be seen.
