|
|
|
|
GIL 2010 signs off on a positive note; identifies mega trends and concludes that public private partnerships to drive the Great Indian infrastructure juggernaut
Frost & Sullivan recently concluded the second edition of its annual flagship event GIL 2010 - Growth, Innovation and Leadership at Bangalore. The Congress, besides focusing on CEOs perspective on growth, had specific industry think tank sessions and several panel discussions that were held parellely. The Infrastructure think-tank focused on three key areas: Opportunities and Challenges, Funding Options and ROI, and Successful PPP Initiatives. The CEO 360 Degrees Perspective on the Indian Infrastructure Sector dwelled on the opportunities available, attractiveness of the sector, competition, and key success factors.
“India has come out exceptionally well after the recent onslaught of the recession clocking a growth rate of 7.4% in FY 2009-10. Lesser dependence on exports for growth, which contributed to about 27 % of the total GDP and greater emphasis on stimulating the domestic consumption explains India’s marked resistance to the global economic shocks,” said Kumar Ramesh, Program Manager - Environment & Building Technologies, South Asia & Middle East, Frost & Sullivan.
Story continues below 
While many comparisons were drawn between India and China’s growth models, experts believe that the next decade might belong to India. Signs of slowdown in the growth of the Chinese economy due to rampant overheating, present India a very promising opportunity to grow faster and surpass China. The session also debated on whether India will be able to sustain a high economic growth of 8-9% with its increasing population? Infrastructure growth will provide the answer to this. Consistent growth in key infrastructure segments is expected to improve India’s economic growth indices.
The think tank also focused on the scope for growth in India. It compared India with China, wherein Kumar Ramesh added, “China invests about 9-10 % of its GDP in improving existing infrastructure and creating new infrastructures to bolster growth. India, on the other hand, invested only 4-5% of its GDP during the 9th and 10th Five Year Plans, while the proposed investments of up to US$500 billion in the 11th FYP are almost 9-10% of the GDP. On the whole, between the 11th and 12th FYP (that is, 2007-2017), an astronomical sum of $1.5 trillion is expected to bankroll various infrastructure projects.”
Some of the challenges deliberated brought to focus that in spite of promoting higher foreign direct investments into various sectors; there are a few inherent challenges that shackle growth, much to the dismay of domestic and foreign investors. Land acquisitions, equipment shortage, environmental clearances, bureaucratic delays, unprecedented delays caused due to changes in government procedures result in delayed release of funds in the case of cash contracts.
Further delay is caused due to time and cost overruns, absence of an independent regulator to settle disputes between the government agency and service provider, with no clear cut policy on public private partnership at both the central and state government levels.
The way forward, however, pointed towards Public private Partnerships (PPP). The experience of PPPs in India represents a mixed bag - while there are scores of examples of successful PPP projects, there are also a number unbankable PPPs. Nevertheless, private sector participation is necessary in order to realize higher achievement rates for the investments envisaged in the 11th FYP. Matured institutional and regulatory frameworks for PPPs, political will, faster clearance of well-designed PPPs are needed to strengthen the PPP model in India. Such initiatives will also impart thrust to the sectors that have traditionally received scant private investments.
Leveraging private participation is critical for infrastructure development with public sector facing constraints in budgetary allocations. Besides, management and project execution skills of private players can mitigate risks and create substantial shareholder value in the medium-to long-terms.
| Articles | |
 |
Site Map
 |
 |
 |
 |
|  |
COMMENT
Comment on this article