On the brass tacks -II
In past 15years or so, great emphasis has been placed on
building of physical infrastructure by private sector enterprise. The private
public partnership (PPP) model has been aggressively promoted for building
infrastructure assets and public utilities like roads, airports, rapid urban
transport system. Many projects under PPP model have failed to produce desired
results. Besides a large number of projects are mired in controversies. The
reasons are many and varied.
Administrative delays in granting necessary approvals, failure
in evolving and implementing an appropriate compensation and rehabilitation
policy leading to frequent public protests, stalling of work and judicial
intervention are some popular reason cited for partial failure of PPP model.
In my view, inadequate or no attention to social costs and
sustainability concerns are bigger reasons. For example, consider the long jams
at toll booths across cities. A detailed social audit might suggest that in
many cases the time and fuel wasted at toll booths is often more valuable than
the toll collected.
Besides, in general economic terms, we have failed in making
distinction between the “need” and “demand” for infrastructure. There is no
denying that the need for infrastructure is colossal. To meet the
ends of social justice, economic equality, sustainable economic growth and
regional balance, development of social (e.g., education and health) and
physical infrastructure (roads, communication, power etc.) is imperative. But
at the stage of development where India stands today, the demand (ability
to pay to fulfill one’s needs) for infrastructure is abysmally low.
Moreover, first the rush to accumulate cheap credit and then
fiscal misadventure in the name of stimulating the economy post Lehman crisis
did lead to excessive debt both at government as well as corporate level in
past 10years. This did bring unmanageable demand forward in time.
For example, over 50GW power projects were initiated and
fertilizer policy was made when the feed stock supply chain to fuel the power
and fertilizer plants was far from ready. The capacity to pay unaffordable toll
was not there when over 5000km of toll roads were commissioned. Regulatory
framework for sustainability was not ready when mining rights were awarded for
numerous coal, iron ore and bauxite mines.
Many of these power plants are lying idle and so are numerous
industrial projects conceived based on supply assumptions from these plants.
Many toll roads have become unviable or are lying uncompleted. Most coal and
other mines are yet to start commercial production and KG basin is producing
only 1/5th the assumed gas production.
The infrastructure development therefore needs to be mostly
socio-political effort rather than an economic proposition, in my view.
The efforts to make roads, power and airports projects
economically viable by bundling land and coal resources in past 15years have
proved rather counterproductive. The evolving socio-political paradigm
indicates that in foreseeable future it would not be possible to masquerade
land and mining mafia deals as infrastructure development projects. ....to
continue tomorrow
Thought for the day
”How oft the sight of means to do ill deeds makes ill deeds done!
"
-
William Shakespeare (English, 1564-1616)
Word for the day
Cupidity (n)
Eager or excessive desire, especially for wealth; greed;
avarice.
(Source:
Dictionary.com)
Teaser for the day
Modi is establishing direct communication with various
sections of the society, e.g., youth, women, businessmen, foreign leaders etc.
The frustration of media persons and studio experts is
understandable!
Watch keenly, if "Mama Modi" takes the
"Children Day" away from "Chacha Nehru".
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