India’s infrastructure development is set to accelerate and meet global benchmarks even if the private sector is not in a hurry to grab the vast investment opportunities that are opening up, top cabinet ministers said at the Economic Times India Infra Summit 2017.
The government is confident of meeting aggressive targets and wants private investment in infrastructure but it has enough resources and access to financing to implement projects, minister of road transport, highways and shipping Nitin Gadkari told the gathering of industrialists, chief executives and corporate leaders in New Delhi on Thursday.
“Our sector is moving and you all are welcome to participate. But don’t misunderstand me we don’t have any problems in investing. NHAI (National Highways Authority of India) is ‘AAA’ rated and investors want to invest in it. Our toll income is more than Rs 10,000 crore a year,” he said.
“We already have a lot of offers from investors… We have 101 projects which we can monetise and get Rs 1.2 lakh crore.” He said the government will give the highest priority to local investors and contractors.
Railway minister Suresh Prabhu said the government had inherited challenges as no investments were made by its predecessors in capacity building or improving services. “We have a huge historic backlog in which not only we have not invested, we have hardly done anything in the railways,” Prabhu said.
The government expects a big pickup in investments. Urban development minister Venkaiah Naidu said investment of Rs 2.25 lakh crore is expected under the smart city mission, of which the central and the state governments would offer about Rs 1 lakh crore while the private sector is expected to bring in about a quarter of the total, Naidu said, adding that the smart city concept was not elitist and would benefit everyone.
“The Smart City Mission is intended to be a game changer in respect of planning, execution and resource mobilisation,” Naidu said. India needs “political mainstreaming of the urban agenda” as population growth in cities has overtaken that in villages and better solutions are needed, Naidu told a diverse audience at the summit. Between 2001 and 2011, population rose by 91 million in urban areas as against 86 million in villages. In the next 15 years, about 250 million more people are expected to be added to cities.
“The need of the hour is for political mainstreaming of urban agenda. We need to intensify political and public discourse about urban challenges so that meaningful solutions emerge,” Naidu said, admitting myriad challenges that Indian cities faced and illustrating how a government initiative like developing 100 smart cities across the country could elevate quality of life.
Boosting Rail Services
Prabhu said the government was working to bring rail services on a par with global standards. “We are trying to work on a holistic, all-pervasive plan of changing railways, not just creating infrastructure in a manner that will conform to the global standards to live up to the expectations of people. But unfortunately, it will take time,” he said.
The railways was raising financial resources on an unprecedented scale and at the lowest coupon rates, he said. “We are raising these resources and putting them where required,” he said.
Revenue from freight and passenger fares have been under serious threat and despite that the government has made reforms in the freight sector by reducing prices, executing long-term contracts and offering discounts. Indian Railways is also trying to raise revenue by introducing new services for passengers. It’s emphasising infrastructure investment, which is leading to more traffic, Prabhu said.
A plan to save Rs 41,000 crore in 10 years by reducing energy costs has been prepared. Salaries and pensions are big costs over which the government does not have any control but the railways is conducting human resource audits that will improve productivity in the future. The railway dedicated freight corridor will be operational by the end of 2020 and that will ease freight traffic. The railways is also working on the development of stations.
Prabhu said the government will bar the manufacture of conventional coaches from April 1 and focus on those with much better features and technology.