India to invest US$ 11 billion in new roads, bridges and power plants
India’s infrastructure is ranked lower than that of some war-ravaged countries like Sri Lanka. According to the World Economic Forum’s Global Competitiveness Index, India is 89th out of 133 nations for its infrastructure.
In terms of spending, India set aside 6.5 per cent of its gross domestic product in 2009 to infrastructure, compared with about 11 per cent for China. Its per capita spending on city development is US$ 17 per year, just 15 percent of what China spends, this despite the fact that by 2030 it will have 68 cities with a population of more than one million people, 13 cities with more than four million people and 6 mega cities with populations of 10 million or more. In each, a modern infrastructure will be essential.
Poor roads, bad railways and inadequate energy production are an obstacle to foreign investments, which the country needs if it wants to meet that 10 per cent annual growth target it set to lift out of poverty the 828 million people who live on two dollars a day.
Indian roads account for 65 per cent of India’s cargo but many are single lanes and have irregular surfaces, slowing lorries to an average speed of about 20 kilometres per hour in a country with distances that run in the hundreds if not thousands of kilometres.
Indian ports are also obsolete. The average time taken by ships to unload and load at Indian ports is almost 96 hours, about 10 times longer than in Hong Kong.
India also generates about 10 per cent less electricity than it needs.
In a report released back in March, Montek Singh Ahluwalia said that India might need as much as US$ 1 trillion in investment between 2012 and 2017 to pursue its development goals.
The 500 billion fund is thus a “good start but it won’t be enough,” this according to Prasanna Ananthasubramaniam, chief economist at ICICI Securities Primary Dealership Ltd. in Mumbai. In his view, “One fund cannot take all the risks of infrastructure projects.”
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