The day President Pratibha Devisingh Patil outlined infrastructure as key for India’s economic growth, the government decided to provide a special package of Rs 6,000 crore for development of metro networks in smaller Indian cities via the Public Private Partnership (PPP) mode.
Metro trains have been found to be a viable alternative to personal vehicles in Delhi and the network has been expanded to cities such as Mumbai, Hyderabad and Kochi. Except Delhi, the metro services in other Indian cities have been implemented in the PPP mode.
The Planning Commission recently formalized a broad proposal for encouraging more private investment for metro networks in small cities with a population more than 50 lakh.
The success of PPP in some cities has been the reason for the new policy initiative, even though Delhi Metro chief E Sreedharan had opposed private participation. He had cited the problems faced by Delhi Metro with Reliance Infrastructure, the company operating the Airport line, a reason for not allowing PPP in this vital transport sector.
Moreover, Sreedharan believes that a public sector unit can perform better, if they are allowed similar concessions as being proposed for the private bidders. His objections have not found much ground with the commission, which has decided to pursue the PPP mode.
“For this the government plans to provide Rs 6,000 crore to the state governments in the next budget,” a senior government official said. An announcement in this regard is expected in the budget next Monday by Finance minister Pranab Mukerjee.
To provide further impetus to urban infrastructure, the government has decided to allocate about Rs 13,000 crore to the Jawaharlal Nehru Urban Renewal Mission. Most of the money will be provided to improve transport and urban facilities in smaller Indian cities, where there has been a growth in population due to migration.
Another urban sector scheme for the poor, the Rajiv Gandhi Awar Yojana is set to get Rs 1,000 crore to provide housing to urban poor. The scheme was launched recently following the success of a similar programme for rural India.
Patil, in her speech, said infrastructure was critical for development and a high level national transport policy committee has been set up to provide policy direction for an intergrated and sustainable transport development.
The emphasis on infrastructure and social sectors could result in the budget cuts for ministries such as environment and rural development.