Essays

India is one of the fastest growing economies of the world and is witnessing growth, particularly in manufacturing and service sector. Therefore, to realize the full potential of the growth impulses surging in the economy, the provision of quality and efficient infrastructure services is essential.

India's infrastructure includes performance and connectivity of basic systems and services such as roadways, railways, ports, airports and telecom.

Over years, India's soft infrastructure has grown much faster than the hard infrastructure. Today, the Indian telecommunication industry is the world's fastest growing industry with 826.93 million mobile phone subscribers, as of April 2011. The market's first operator was the state-owned Bharat Sanchar Nigam Limited (BSNL), but liberalization led to the entry of private players such as Bharti Airtel, Reliance Communications, Tata Teleservices, Idea Cellular and Aircel. A large population, low telephony penetration levels, and a rise in consumer spending power have helped make India the fastest-growing telecom market in the world, and rural India is further expected to increase the growth in mobile phone services in the next four years.

In comparison, performance of physical infrastructure in Indian economy has been mixed and uneven. Presently, India maintains one of the world's largest rail systems, with 18 million daily passengers, d staff of 1.4 million employees and 17,000 trains operating on 64,000 kilometers of track. The railways traverse the length and breadth of the country and carry over 30 million passengers and 2.8 million tons of freight daily. India also has a far-reaching road network of over 3.314 million kilometers, yet in comparison to telecom, performances of these sectors have been inadequate, especially when counted in terms of the country's surface area or population. While the world's telecom market grew at a faster pace, the growth in country's physical infrastructure like roads and railways has been comparatively slower.

For faster development of infrastructure in the country, in 2010-11 General Budget, infrastructure sector has received much priority. Special emphasis has been laid on the development of rural infrastructure development that has been allotted $61,000 crore, while urban infrastructure development has been allocated $5,400 crore. Allocation for road infrastructure has also been $19,894 crore and a total of $48,000 crore has been kept aside for Bharat Nirman.

To fulfill the significant deficit in the availability of physical infrastructure across different sectors which are hindering economic development, the government is encouraging private participation in the expansion of critical infrastructure and public-private partnerships to improve the viability of infrastructure projects.

Since infrastructure financing have to fall back on long-term contractual savings, the government has decided to put into effect the financing of infrastructure projects through the India Infrastructure Finance Company Limited (IIPCL). To support this, the World Bank has lent a record $9.2 billion to India in 2010, to help finance public-private partnerships in infrastructure, especially in the roads power and ports sector.

India's urbanization level is expected to rise and yet, India's growing cities and towns face major challenges in adequate infrastructure of transportation, water, solid waste, and power sectors. The World Bank is helping to streamline urban transport in Mumbai and improve the delivery of urban civic services in states like Andhra Pradesh, Tamil Nadu, and Karnataka. The Bank has also sought to bring in global best practices in the urban water sector.

A critical problem facing India's economy is the sharp and growing regional variations and poor     infrastructure in low-income states such as Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa and Uttar Pradesh. The Bank has also financed rural credit cooperatives to fund the development of infrastructure in the backwards regions of the country.