The foremost challenge is to make huge capacity addition in a time-bound manner

Notwithstanding the robust economic growth of the Indian economy, the country has lagged badly in vital infrastructure sector with key Central projects, including roads, power and railways getting endlessly delayed resulting in massive cost escalation.

According to the Economic Survey 2010-11 tabled in Parliament on Friday, the implementation of the infrastructure projects at the State and Central level has been unsatisfactory and tardy at best.

Of the 559 central projects costing Rs.150 crore and above, 293 stood delayed by up to 36 months as on October 2010. Only 14 projects were running ahead of schedule while 117 were on schedule.

In the road transport and highways sector, 51 projects reported delays of 1 to 36 months; in the power sector 20 projects reported delays of 1 to 18 months and in the petroleum sector 16 projects reported delays of 1 to 16 months, it said.

However, the telecom sector continues to do well and most of the projects in this sector were on schedule.

The Economic Survey said timely completion of infrastructure projects remained the top priority for sustaining growth momentum and called for streamlining land acquisition and environment clearance for the core sector projects.

“The foremost challenge is to make huge capacity addition in a time-bound manner while ensuring that projects embody value for money and investments result in world class infrastructure,'' the Survey said.

Optimistic outlook

Stating the level of investment and capacity addition achieved so far in the current Plan period is indicative of an “optimistic outlook” for the entire infra sector, the survey said several non-financing constraints needed to be urgently addressed to avoid time and cost overruns.

Though the actual expenditure in the ten infrastructure sectors stood at Rs.10,65,828 crore during the current Plan period's first three years against the target of Rs.9,81,119 crore, the survey said that capacity addition was lower than aimed in power, roads and railway lines.

Quoting a preliminary assessment made by the Planning Commission, the Survey said the infrastructure sector needs a huge Rs.41 lakh crore investment in the XII Plan. “There is an urgent need to streamline land acquisition and environment clearance for infrastructure projects,'' the Survey said.