So we are at that time of the year again when the Finance Minister will come out with a few carrots and sticks to keep India´s economy chugging along.
Since our current Cover Story does a complete analysis of what the infrastructure sector can expect from the Budget, I´ll not waste any words on this issue.
What I am looking out for is a completely different approach to address the country´s infrastructure woes. An approach that is holistic and which can clearly encapsulate what the nation can achieve in the infrastructure space. My attention was drawn recently to the UK´s move to establish a National Infrastructure Commission. Mind you, Britain already has a body called Infrastructure UK which helps meet that country´s long-term infrastructure needs. The National Infrastructure Commission will go a step beyond. It will look at UK´s infrastructure needs over a 30-year horizon.
I would recommend that India comes up with a similar entity. Many infrastructure projects in our country are languishing not just because of paucity of finance, which is of course a very big hurdle, but also because there is no periodic review of progress, lack of long-term planning and vision and political opposition. The various stakeholders involved are at loggerheads with each other. And the country suffers (we might stand to lose Rs 1.77 lakh crore because of delayed infrastructure projects, according to latest reports).
If there is one thing that I learnt during a recent visit to Japan is that the country spends a lot of time planning and working out the minutiae before embarking on any project. Back home, we are in thrall of ´big-ticket´ announcements. But as per a report by Indicus Analytics, MoUs have a poor track record of fructification. The highest rate of conversion is no more than 19 per cent in Haryana followed by 15 per cent in Uttarakhand & 13 per cent in Gujarat. The ´big´ announcement during the latest US President Obama´s visit relating to a ´nuclear breakthrough´ is a similar high-decibel issue which has not resolved anything.
Coming back to the UK´s Infrastructure Commission, Britain has already clearly figured out its climate change mitigation objectives, the emphasis that will be given to disaster management, the details of its long-term infrastructure taxation policy, forecasts of likely technological obsolescence of current infra approaches... it´s almost an endless list.
My main point is that infrastructure is too important an issue to be addressed only by an annual budgetary exercise. Even there it gets a brief mention. The entire sector is aware that financing infrastructure is a big problem and getting a bank of economically viable projects readied has remained a challenge since a decade. Why not launch a whole bank of prencubated viable projects as was indicated at the Progressive Punjab Summit by the CEO of Punjab Bureau of Investment Promotion, last year? The PM´s NITI Aayog meeting has factored in the buy-in by the CMs of States which guarantees better coordination, but since the 12th Five-Year Plan is likely to remain on track as envisaged, the NITI Aayog should become an enabler with the CMs to roll out the projects without any obstacles than get back to what the Planning Commission used to do, ´plan on paper´. The CMs are well aware of their industrial clusters, tourism circuits, IT communities, challenges and opportunities. They need to work with the NITI Aayog and their own State machinery to create this bank of projects and win VGF or allocation of funds from the Centre, only then will the Planning Commission turn into Action Commission and we will see some action on the ground. Budgets can bring back the mood, but we need action following the Budget.