Today, infrastructure development is at a crucial juncture in India. Since only tentative steps have been taken towards a more pluralistic provisioning, especially by the private sector, the infrastructure as a whole has reached a point of irreversibility. It is no longer possible to go back to the old mode wherein the state, both central and provincial, actively provided the bulk of physical infrastructure. The reason is not that ‘the state has no funds, but the assumption that in a large market economy many infrastructural sectors could indefinitely be run non-commercially. Keeping that in mind, this chapter discusses the issues in infrastructure development in India and highlights the policy, regulatory, legal and institutional constraints in infrastructure development. Other constraints that are severe in the Indian context such as those emanating from land and its acquisition for development projects, institutions and policy are brought out in an integrated manner and the remedies are suggested. Topics covered in the chapter are the background of infrastructure reform emanating from a more liberal economic environment, brief review of the past, issues in development of infrastructure today, macroeconomic linkages, role of the private and public sectors, restructuring of state owned utilities, subsidy reform the political situation, leverage points for change and reform, regulatory strategies. The focus of the study is to bring out the problems and opportunities in restructuring of the infrastructure (public utiltities and related sectors) and reform of regulation. The study puts forward the argument that some of the important changes brought about ostensibly to further commercialization may actually have damaged its long-term prospects. These dysfunctional changes will soon have to be corrected.
Issues in Infrastructure Development Today: The Interlinkages
Author : Sebastian Morris