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.
Prime Minister Manmohan Singh (R) gestures as Planning Commission deputy chairman Montek Singh Ahluwalia speaks during a meeting in New Delhi. AFP/Prakash Singh
“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.