The government got down to business on Wednesday — two days after getting stung at the Congress working committee meeting by partymen for the alleged policy paralysis — and announced a set of high targets and tight deadlines for the infrastructure sector.
“In these difficult times, we must do everything possible to revive business and investor sentiment,” Prime Minister Manmohan Singh told ministerial colleagues in a meeting specially convened to review the status of infrastructure projects.
He asked the ministries to go the “extra mile” for implementing the projects and “expeditiously resolve any inter-ministerial differences that may arise”.
Noting that the infrastructure sector would need more than $1 trillion (Rs. 55 lakh crore in current prices) in the next five years, the PM said the government alone could not invest such a huge amount and it was important to involve the private sector.The infrastructure push came a day ahead of a cabinet meeting that is likely to allow foreign direct investment of up to 26% in the pension sector. Last year, political compulsions forced the government to quickly bottle up reformist moves, including allowing FDI in multi-brand retail and pension businesses.
Industry captains complained that a slew of proposals, including the decision to retrospectively tax corporate transactions, such as the 2007 Vodafone deal, sparked fear among global and domestic investors.
Singh said at the meeting: “We must work to create an atmosphere conducive to investment, and remove bottlenecks... We are committed to taking … measures to reverse the present situation.”
The meeting, which set targets for individual sectors (see graphic), took place in the backdrop of rising prices and sliding growth — GDP growth crashed to a nine-year low of 5.3% for January-March — that remain the government’s key worries, besides a heavy debt burden.
Time and cost overruns have been a bane for infrastructure projects hit by fund shortages, environmental concerns and delays in government clearances.
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Measures: Forty-two projects, including two new ports for Andhra Pradesh and West Bengal, will be taken up in 2012-13.
Impact: Will benefit areas surrounding new ports through improved infrastructure and real estate development, besides spinning jobs for locals.
Measures: Work will begin on three new airports in Navi Mumbai, Goa and Kannur and international airports in Lucknow, Coimbatore and Gaya.
Impact: Airport modernisation projects will create new jobs, besides boost infrastructure and construction sectors.
Measures: About 9,500 km of roads and highway projects will be awarded in 2012-13.
Impact: Will boost infrastructure industries, such as cement, and create jobs for locals.
Measures: PM wants dedicated freight corridor project commissioned in December 2013 — two years ahead of schedule. Mumbai-Ahmedabad bullet train proposal will be finalised in 2012-13.
Impact: Freight corridor will create new townships and spin new jobs besides boosting infrastructure and construction sectors.
Measures: Plan to add 18,000MW, including 2,000 MW from Kudankulam Atomic Power Project, to India’s generation capacity in 2012-13.
Impact: Will help bridge India’s energy deficiency that has been one of the biggest letdowns for investors.
Measures: Coal India Ltd will dispatch 470 million tonne of coal to all sectors — a hike of 8.8% .
Impact: Will help partially address power plants’ needs, most of which are facing coal shortage.