India’s infrastructure problems

  • Without infrastructure, an economy cannot grow
  • Industry and services cannot expand without highways, electricity, ports and airports, rail links and pipelines.
  • The 12th Plan projects infrastructure investment of a trillion dollars.
  • India is a global leader in public-private partnerships in infrastructure. The private sector financed 36% of infrastructure in the 11th Plan (2007-12), and is expected to finance fully 50% in the 12th Plan.
  • Problems for private players:  Infrastructure requires heavy loans, often twice as much as equity. Such loans have a fixed repayment schedule. If a project is completed on time, revenue from the project will finance the repayments. But if there are delays of months or years, the project is squeezed badly.
  • Other problems for the private players include fuel supply problems, changes in environmental regulations, land acquisition etc.

I will elaborate further on initiatives to address the delicate issues in a later post.

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