By allocating 46 per cent of the total plan expenditure to infrastructure development, Finance Minister Pranab Mukherjee has clearly shown how imperative this is to return to a higher growth trajectory. That highways, railways, and power got a lion's share of the allocations for 2010-11 signals a clear priority to connectivity and electricity. Rural roads too got a quantum jump in funding. No less significant is the government's commitment to involving the private sector all the more in infrastructure development. Witness Mr. Mukherjee's statement: “With development and economic reforms, the focus of economic activity has shifted towards the non-governmental actors, bringing into sharper focus, the role of government as an enabler.” So, the objective seems to be to create an “enabling ethos” for Public Private Partnership (PPP). Going by the Rs.1,73,552 crore allocation for upgrading both urban and rural infrastructure, it is evident that the government wants to accelerate development of high quality physical infrastructure such as roads, ports, airports, railways and power. In this mix, the road and energy sectors come in for special attention for two reasons — some of the ongoing programmes are critical and there has been a perpetual shortfall in the achievement of targets over successive Five-Year Plan periods. The last two years have seen a substantial increase in investment in infrastructure, but as a proportion of the GDP the figure is just around six per cent, three per cent short of the requirement.
The Finance Minister has raised the budget allocation for the road transport sector from Rs.17,520 crore to Rs. 19,894 crore — a 13 per cent increase. The government, notably the Highways, and the Planning Commission have targeted a construction pace of 20 kilometres-a-day of the National Highways. Though a massive highways upgradation and expansion programme was launched way back in 1999 and subsequently revamped in 2006, the progress has not been satisfying. Litigation and implementation delays continue to hamper the effort. Similarly, on the power front, there has been a major shortfall in reaching the targets for the 8th, 9th, and 10th Five-year Plans. Even the 11th Plan target is unlikely to be reached. The allocations for the power sector have been doubled for the coming year, and a major impetus given to new and renewable energy. It is not enough for governments to just allocate funds. Infrastructure projects must be made attractive for private and foreign investors, and the States need to be fully involved in implementing and monitoring them.