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INFRASTRUCTURE IS THE KEY

WITHIN DAYS OF announcing his decision to focus on coordinated development of infrastructure, Prime Minister Manmohan Singh has constituted a high-powered committee, which he himself will head. This body will monitor and facilitate the implementation of infrastructure projects in the country. It is in keeping with the United Progressive Alliance Government's declared intention to enlarge the role of the Planning Commission that its Deputy Chairman, Montek Singh Ahluwalia, has been named member-secretary of the panel. With Ministers holding charge of key economic portfolios — Finance, Railways, Surface Transport, Power, Petroleum, Commerce and Industry — as members, the committee will have a smooth interface with the Government. This will ensure that substantive decisions are taken and the hurdles to implementation of critical projects overcome expeditiously and without hassle. If achieving an eight per cent growth in GDP is to be taken up in a businesslike way, the key lies in the development and expansion of infrastructure. Unless the bottlenecks in highways, ports, telecommunications, Railways and power are removed, it will be impossible to sustain a higher trajectory of growth.

Finding the investments required for a massive expansion of infrastructure facilities across the country will be the real challenge. With the Deputy Chairman of the Planning Commission and the Finance Minister on the panel, it should be possible to identify ways and means of raising adequate resources to fund these crucial projects. Despite opposition from some of its allies, the UPA Government is serious about privatisation of major airports in a bid to raise resources for their modernisation and expansion. So far as the Railways are concerned, the Centre has not been able even to identify areas in which the private sector can play a part. With the introduction of more passenger trains every year, congestion on the lines is becoming a major problem; it needs to be solved if turnaround time and capacity utilisation are to improve. New highway projects provide for toll ways, at least in some stretches, to raise resources and to encourage private participation in `Build Own Operate and Transfer' mode. The private sector has emerged as a key player in telecommunications and the public sector Bharat Sanchar Nigam is now trying to meet the challenge of competition. It is the power sector that lags far behind. Many major private projects have not taken off and power purchase agreements have turned out to be unrealistic and, in some cases, scandal-ridden.

The high-powered infrastructure committee must take a fresh look at power sector reforms. State Governments have not been able to gather the required political courage to push through critical reforms in this sector. It is clear that without sound and balanced reforms State Electricity Boards (SEBs) cannot be pulled out of the red. Unless SEBs are financially healthy, they cannot purchase power from private producers. The collapse of the much-hyped Enron power project in Maharashtra was a big setback to the strategy of fast-track privatisation. So much so, the Planning Commission and the Power Ministry appear convinced that the public sector will remain the key player in the electricity sector. Unless there is assured supply of quality power, industrial development cannot surge ahead to promote higher growth. For agriculture to post a four to five per cent growth, it is imperative that energy and water get priority attention. The hope is that unlike other panels and Ministerial Groups, Dr. Singh's committee will be able to take a hard look at the problems hindering growth and arrive at quick solutions. State Governments must also pull their weight in this national endeavour.

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