Infrastructure Targets for 2012 – 13

by Manshu on June 7, 2012

in Economy

The big news today was the ambitious targets set by the prime minister for infrastructure investments, and the idea behind this is that by spending money on infrastructure and building that up, the economy can be revived, and India can return to the 9% growth level it used to see a few years ago.

This is a small bit of good news because it shows that the government is trying to do at least something to improve the current situation and that they aren’t content blaming everything on Greece or global situation.

What part of these plans will actually materialize is anyone’s guess, but I think it is safe to say that because these targets are so high they will definitely be missed.

That’s not such a bad thing though, the strategy seems to be to shoot for the stars so you at least get to the moon. Some highlights of the plan are as follows, but before you start reading them please note that these indicate that projects will be awarded and not that the target port, airport or road will be finished in the next year.

Ports: Two brand new ports in Andhra Pradesh and West Bengal and a total of 42 projects in the year will be awarded.

Airports: Project to build airports will start in Itanagar, Navi Mumbai, Goa and Kannur.

Roads: Total of 9,500 kms of road projects will be awarded in the year. This doesn’t imply that 9,500 kms of road will be built in the year, just that projects for this much length will be awarded. For reference, a Jan 2011 article states that China built 33,000 kms of road in 5 years, which is about 6,600 kms per year. I’ve read earlier that India has had plans to build 20 kms per day but I don’t think we were ever even close to achieving it.

Railways: Investment worth Rs. 20,000 crore will be awarded in the Mumbai corridor.

Power: Capacity addition target is 18,000 MW.

Coal: Coal India will dispatch 470 MT of coal this year which is an increase of 8.8% from last year.

Earlier today I read a few articles that said that you have to be really wary about these plans because there is no end date associated with any of them, and at that time I hadn’t realized that there isn’t even a begin date associated with them!

I hate the phrase cautiously optimistic, but that’s the thing that comes to mind reading these targets.

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{ 1 comment… read it below or add one }

DJ June 8, 2012 at 12:49 pm

What was funny was the underlining in the RBI press release. Major PR effort on to indicate government seriousness. Lol :)

Yet, there is no realization of the problems. Part of the problem has been that either there is corruption in the contracts “awarded” and/or the contracts never get executed upon in a reasonable time frame. They should have indicated what they would do to fix that. And, the need for PPP is reluctantly admitted. But, no talk about how they will induce private players to invest and how they will improve how private players are treated. Lastly, no mention of how states are being aided in their development efforts.

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