ECONOMICS ASSIGNMENT

REPORT ON INFRASTRUCTURE

ISHANI CHOUDHURI
MCOM FIRST SEMESTER
ROLL NUMBER:-6
 According to the economic survey report 09-10, in tandem with the pick-up in
overall industrial growth, core industries and infrastructure services have also
evinced signs of recovery with easing of supply bottlenecks in certain sectors and
demand recovery in others.Core industries like power, coal and other
infrastructure like ports and roads are also reviving. Available evidence points to
a steady revival of flows of investible resources. However, the levels of
broadband penetration, capacity creation in some crucial infrastructure sectors
and the state of development of markets for longterm finance remain causes for
concern. There is need to develop infrastructure to complement and sustain the
economic growth momentum. Efforts—legislative, administrative and executive—
are on to minimize the infrastructure deficit, ameliorate bottlenecks in completion
of projects and nurture core industrial intermediates and infrastructure services.

Indian Railways is the third largest rail network in the world under a single
management.
Better resource management, through increased wagon load, faster turnaround
time and a more rational pricing policy led to a perceptible improvement in the
performance of the Railways. Out of freight and passenger traffic, the
freightsegment accounts for about 70 per cent of revenue. Railways has taken a
number of steps to attract additional traffic like dynamic pricing policy through
which differential tariff is charged to take care of skewed
demand during different periods of the year and between different regions. The
freight for export of iron ore has been reviewed and the rate brought down
significantly.

Similarly, passenger fares have also been rationalized. Indian Railways has
launched a new class of passenger-carrying Duronto trains in September 2009.
Duronto is a non-stop super fast passenger-carrying train, ensuring better speed,
and security for passengers. The first-ever Yuva trains which are targeted mainly
at unemployed youth have been introduced between Howrah and Delhi and
Hazrat Nizamuddin and Bandra. These are being introduced to ensure that youth
of low-income groups can travel at low rates between major cities. Use of bio-fuel
in Railways is also undertaken.

Upgradation of passenger amenities Indian Railways has decided that 17 more railway stations
would be added to the existing list of 358 Adarsh Stations. Railways will develop Adarsh Stations
with basic facilities such as drinking water, adequate toilets, catering services, waiting rooms etc.
A PSU of the Ministry of Railways has started a centralized 24x7 toll-free
telephone for railway users to make suggestions on catering services on Indian
Railways. Rail Sampark, has recently introduced SMS Facility. For meeting the
catering requirements of common passengers, Janta meals priced at Rs 10 has
been revamped. Besides, Railways has plans to open Janahaar cafeterias
exclusively to sell economy meals and Janta meals.
Multifunctional complexes in station premises will provide rail users facilities like
shopping, food stalls and restaurants, book stalls, PCO/STD/ISD/fax booths,
medicine and variety stores, budget hotels and underground parking.
During the Eleventh Five Year Plan period, electrification of 3,500 route km of
railway is planned with an outlay of Rs3,000 crore, taking the percentage of
electrified network to 33.4 per cent. In the first two years of the Five Year Plan,
1,299 route km has been electrified.

The country’s road network consists of national highways (NHs), state highways,
major district roads, other district roads and village roads. About 27 per cent of
the total length of national highways is single-lane/intermediate lane, about 54
per cent is two-lane standard and the balance 19 per cent is four-lane standard
or more. In 2009-10, as against the stipulated target of developing about 3,165
km length of NHs under various phases of the NHDP, the achievement up to
November 2009 has been about 1,490 km.Steps taken to expedite the progress
of theNHDP include regular monitoring of contracts and progress reviews,
appointment of senior officials byState Governments setting up of a Committee of
Secretaries etc. Recent initiatives taken included restructuring of projects to
reduce total project cost (TPC) to make them financially viable, urging lenders to
resolve issues inhibiting financial closure, expeditious land acquisitions and
shifting of utilities. These are expected to increase the pace of award under the
NHDP.
Construction of rural roads under the Prime Minister’s Grameen Sadak Yojana
(PMGSY) During the first threeyears of the Eleventh Five Year Plan, the flow of
expenditure under the PMGSY seems to be on course for meeting the Plan
target. In addition to the PMGSY there are roads built by PWDs and Panchayati
Raj institutions in rural areas, the data on which are available only with a lag.

The civil aviation sector had shown signs of slowdown in passenger traffic during
2008 due to the steep rise in fuel cost coupled with the impact of global economic
slowdown. Signs of recovery became visible in the second past of 2009.
Development of airports at Delhi and Mumbai has been taken up under PPP
mode. The Airports Authority
of India (AAI) plans to construct of Greenfield airports in the north-eastern region
with budgetary support.
Creation of Heliporthas been proposed in New Delhi to provide connectivity to tourists and the
business community, especially during the Commonwealth Games 2010, In order to have
transparency in airfare advertising, Rule 135 of Aircraft Rules 1937 has been amended wherein
airlines shall display tariff in a conspicuous manner along with breakups.

India has 12 major ports and 200 non-major ones. Of the non-major ports, about 66 are handling
traffic. The total traffic carried by both the major and non-major ports during 2007-08 was
estimated at around 723 million tonnes. The 12 major ports carry about three-fourths of the total
traffic, with Visakhapatnam as the top traffic handler in each of the last seven years. Traditionally,
most ports in the world are owned by the public sector. But privatization of port facilities and
services has now gathered momentum.

Delhi and Kolkata have introduced Metro Rail systems in their cities. Delhi Metro is a joint
venture company of the Government of India and Government of the National Capital Territory of
Delhi. While the existing Kolkata Metro is presently under the direct control of the Ministry of
Railways,
Infrastructure services that were affected by the slowdown in general economic
activity during the previous year have gradually revived in the current fiscal with
easing of supply bottlenecks in certain sectors and with demand recovery in
others. However, considering the dimensions of the infrastructure deficit in the
country, growth in infrastructure capacity and services will need to be accelerated
on a big scale. Raising the capacity creation in some critical infrastructure
sectors to the desired level is a major challenge.
Initiatives required are Energy, Infrastructure and Communications 269
multifaceted, and include those promoting flow of domestic and global resources
to infrastructure, facilitating formulation, approval, financial closure and award of
projects and easing implementation hurdles in terms of disputes in land
acquisition, rehabilitation, contractual issues, shortage of raw materials, capital
goods and fuel, environmental disputes and inadequate availability of skilled
manpower. The Planning Commission has estimated
that as compared to 4.5 per cent in 2003-04, investment in infrastructure as a
proportion of the gross domestic product (GDP) rose to 6 per cent in 2007-08.
Efforts are required to
channelize the long-term contractual savings to infrastructure sectors on a much
larger scale.

According to World Bank Report 2005, infrastructure has a central role in the
development agenda and is a major contributor to growth, poverty reduction.
Numerous studies have demonstrated that economic returns to infrastructure
investments are high, and infrastructure services—especially those contributing
to improved investment climate and trade—can make significant contributions to
the growth of an economy. Governments in the developing world are investing
too little in infrastructure. Despite the high returns from infrastructure investment,
fiscal stresses are exacerbating investment needs. Evidence suggests that,
partly as a result of the fall in infrastructure investment
and deferred maintenance, rates of return on infrastructure investment are
extremely high. There is a lack of balance between spending for infrastructure
and for other purposes. investment levels have been relatively steady over the
past few years in most regions and increasing in India. In addition, new
modalities of private investment—especially from local and neighboring country
investors—are emerging. Overall, despite problems faced during the rapid entry
of the private sector in the 1990s, private sector discipline and financing have
had a positive impact on infrastructure service delivery, and more is needed.A
major objective in India is to improve the quality and reliability of existing
infrastructure services essential to maintaining economic growth and
competitiveness. The quality of infrastructure services plays a key role in the
ability of the private sector to operate efficiently. China and India are beginning to
respond to their coal dependence by advancing cleaner energy sources and
several countries are taking steps to reduce indoor and outdoor air pollution.
However, few cities have sufficient environmental infrastructure to prepare them
for the rapid growth they face. The Bank has contributed significantly to disaster
recovery efforts across the developing world including nearly a billion dollars for
Asian tsunami recovery, reconstruction following the Gujarat earthquake in India
($443 million).