Economy
Why Manmohan Singh’s infra targets are unreal

While the Prime Minister targets to invest Rs2 lakh crore in the core sector, will the bottlenecks on the ground suddenly go away under the diktat of a weak PM?

After suffering from a "policy paralysis" for several years, prime minister Dr Manmohan Singh has set a very ambitious investment target of Rs2 lakh crore for infrastructure projects in current fiscal."Infrastructure needs over $1 trillion in the next five years. The government alone cannot invest this amount. Therefore, importance is being given to public-private partnership (PPP). Achieving targets in key infrastructure sectors is the key to success and will inspire confidence about the overall economic growth rate," he said.

For the ports sector, a target of Rs35,000 crore investment has been set for 2012-13, up from Rs16,585 crore in the last fiscal. A target of Rs8,798 crore has been set for aviation sector through the PPP mode for 2012-13, an increase from Rs4,877 crore last fiscal. Referring to the civil aviation sector, Dr Singh said work will be awarded on three greenfield airports-at Navi Mumbai, Goa and Kannur and new international airports at Lucknow, Varanasi, Coimbatore, Trichy and Gaya. Also, two new airline hubs will be created at Delhi and Chennai in the current fiscal, "making us a destination as well as a transit point," he said. The meeting decided that work on the Itanagar airport would be commenced with a total investment of Rs2,100 crore by the Airports Authority of India. By the end of next month, additional PPP projects would be finalised for 10-12 existing airports and for 10-12 greenfield airports. These would be awarded during the year.

Is even a fraction of this is achievable? While the PM has set a remarkably high target for investment, he has no control over states that would do the groundwork for implementing the infra projects. After all, land acquisition which absolutely at the heart of any infrastructure project is a state issue. Forget states ruled by other parties, even in states where Congress is in power, Dr Singh will find it difficult to crack the whip. Take for example, Maharashtra. Although Prithviraj Chavan belongs to the Congress and he would listen or obey instructions from the PM, he does not have any control over NCP ministers and their powerful portfolios.

Indian industries have been expressing various concerns regarding administrative delays, deteriorating infrastructure and power situation across states. Especially Congress-ruled states like Maharashtra are fast losing their advantage as industrial hub and pro-industry state.

Over the years, Maharashtra has been an investor-friendly state with stable regulatory environment, strong human capital, easy access to capital and presence of some of the biggest industrial houses. However, Maharashtra's leadership position is being challenged by upcoming states like Gujarat, Andhra Pradesh, Karnataka and Rajasthan. The reason is major bottlenecks in Maharashtra like problems in land acquisition due to unclear policies, delays and difficult procedures for getting various clearances and poor infrastructure.

Political parties in Maharashtra accuse chief minister (CM) Prithviraj Chavan for the policy paralysis in the state. Although Mr Chavan belongs to the Congress, he had to share important portfolios like finance and power with coalition partner the Nationalist Congress Party (NCP), headed by Sharad Pawar. In fact, two days back, Pawar in a veiled attack on the CM said there was collapse of the government's "decision-making process". Maharashtra was losing out on big investments and industrial projects due to delays in taking major decisions, he added.

In short, the policy paralysis and delay in decision making would remain as it is. The PM's bold talk will remain just that-talk. Infrastructure investment does create a multiplier effect. But it is virtually impossible to implement in the absence of strong leadership.

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Cabinet defers pension bill due to opposition from Trinamool

The decision to defer the controversial bill assumes significance as the UPA government would not like to ruffle the feathers of Trinamool Congress ahead of the Presidential elections
 

New Delhi: With Trinamool Congress, the key alley in the united progressive alliance (UPA) coalition raising the banner of opposition to the pension reform bill, the government on Thursday played safe by deferring the legislation, apparently keeping in view the upcoming Presidential polls, reports PTI.

The Union Cabinet was to take up the Pension Fund Regulatory and Development Authority (PFRDA) Bill, 2011, which provides for private sector and foreign investment in pension sector, but put it off without any consideration, sources said.

The decision comes in the wake of Trinamool Congress member and Railway Minister Mukul Roy writing to Prime Minister Manmohan Singh and Finance Minister Pranab Mukherjee yesterday, saying that more discussions were needed on the bill, sources said.

Roy told Singh and Mukherjee that his party's view on the bill was not articulated as it has no member in the Parliamentary Standing Committee on Finance which has considered the legislation. Subsequently, the decision to defer the bill was taken last night.

The decision to defer the controversial bill assumes significance as the government would not like to ruffle the feathers of Trinamool Congress ahead of the Presidential elections.

The Cabinet, as per the agenda, was scheduled to approve changes in the PFRDA Bill in light of the recommendations of the Standing Committee on Finance, to pave way for passage of the bill in Monsoon session of Parliament next month.

The Cabinet, sources said, was required to take a view on the proposal of ensuring assured returns to pension fund subscribers, as suggested by the Committee, headed by senior Bharatiya Janata Party leader Yashwant Sinha.

The PFRDA Bill, which has been pending for several years, seeks to open the pension sector to private sector and foreign investment.

The proposed legislation was introduced in the Lok Sabha or the Lower House of Indian Parliament on 24 March 2011.

The PFRDA Bill provides for establishment of a statutory authority to undertake promotional, developmental and regulatory functions in respect to pension funds.

Interim PFRDA is functioning since 2003 through an executive order.

PFRDA, set up as a regulatory body for pension sector, is yet to get statutory powers as the Bill pertaining to that effect lapsed in Parliament with the expiry of last Lok Sabha in 2009.

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