By the time this issue reaches your hands, the new government would have taken over. Which are the burning issues in the infrastructure space that have to be tackled on an urgent basis?
First, projects that have got all the mandatory clearances but are stuck on administrative clauses need to be cleared. The bureaucracy should be reassured that there would be no witch-hunts from the political leadership if any decision goes awry. The Project Monitoring Group concept should be further extended to states. And there have been reports that fourteen states are waiting for the elections to end to set up monitoring groups, similar to one at the centre to facilitate clearance of projects.
Second, all issues pertaining to money stuck in arbitration should be resolved within six months. Because these funds are stuck, these projects cannot be re-tendered, so the work itself is stuck. In these projects, all kinds of feasibility studies have been carried out, 90 per cent of the work has been completed, money has also been allocated. Almost all the funds available to the nation have been utilised, but you are not getting the fruit. Around Rs 25,000 crore is stuck and this money cannot be re-lent. We can't turn to the courts as they are burdened with the backlog of cases. The new government should develop a fast track mechanism for infrastructure related projects on the lines of the PMG. These cases should be resolved in the next 6 months to one year.
Third, the ministries of roads and highways, railways, civil aviation and shipping should be merged into one ministry to create a unified Ministry of Transport. Of course, this will mean that the new PM will have that many less Cabinet posts to hand out, but this is the only way that the transportation sector will get a boost.
Fourth, the Centre should form a National Infrastructure Board which should have adequate representation from all the States. Decisions should not be imposed by top-down administrative diktats, but must be implemented in consultation with all States.
Fifth, all required clearances (including environment and forest okays) must be in place before a project is tendered. This will eliminate cost over-runs due to delayed project clearances. NHAI's mandate that 90 per cent land should be acquired before putting the project to bid should now be mandated at 100 per cent.
On political party manifestos, the BJP is curiously silent on power sector reforms, but it seems to have done some thinking on the infrastructure space. The Congress makes the right noises in its manifesto, with its $1 trillion budget for infrastructure; a National Environmental Appraisal and Monitoring Authority; a National Wind Energy Mission and a vague promise that 1 million plus populated cities would be covered by high-speed rail. The BJP promises a high-speed rail network along the quadrilateral, 100 smart cities, an agri-rail network, a National Land Use Authority, a river interlinking plan and measures to develop and modernise ports. Apart from judging parties by the GDP growth that prevails during their rule, which causes much debate, one must compare the manifesto with the accomplishment and put it up on the website of the Election Commission. This will serve as 'caveat emptor' as parties will be conscious of what they say and what they finally do.
I am afraid that a lot of these proclamations might just turn out to be empty promises. What's needed is much more attention to detail. Take for example the problem of infrastructure funding. The banking sector is already overexposed to the infrastructure space, but we have pension funds and insurance companies which can be a source of long-term finance for infrastructure projects. But the PFRDA and IRDA impose restrictions on pension funds and insurance firms for infrastructure lending. On the lines of the permission granted to NBFCs, banks should also be permitted to issue infrastructure bonds. Measures must also be taken to deepen the bond market in India to allow infrastructure companies to use this vehicle to raise long-term funds.
A recent Deloitte report says that total investment across all infrastructure sectors in 2012-13 was Rs 534,645 crore, the least since 2010-11. And the Government plans to attract investment of Rs 65 lakh crore in the infrastructure sector during the12th Five Year Plan. The agenda for any government irrespective of the party, has to be revival of the economy. A decisive government definitely has our vote and hopefully our voters have cast their franchise in electing a strong government. The month of May just got hotter and hopefully will put pace on plans.