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Money cannot resolve this problem...
Wed, 23 Mar Pre-Open

The Indian government has achieved a track record for itself when it comes to execution of infrastructure projects. Take any project from any sector and you can safely assume that the execution will be just half of what is estimated for the given time frame. Here we are not referring to the fate of the power or road projects that have grabbed headlines for poor execution in recent months. In fact this time the execution is appalling in a space where the typical hindrances do not occur. Neither is there any shortage of funds, nor is it held back due to policy issues nor are the projects stuck due to land acquisition problems.

One of the government's foremost missions is to empower the country's rural poor. In fact this is why even the causes of biometric identity cards and financial inclusion are in its top priority. But the priorities seem to be clearly misplaced when one checks at the track record in construction of rural homes. As per the latest government reports, nearly 40% of the rural homes that were to be constructed this fiscal are yet on paper. Of the 2.9 m homes that were targeted to be built in the villages only 1.7 m have been constructed so far. This makes it one of the worst performances in four years. What is even more shocking is the fact that just 58% of the total available funds were spent on the project.

Based on the projected housing shortage in the country, the Planning Commission had set a target of building 15 m rural homes during the 11th Five-Year Plan period. So far, about 9.2 m homes (60%) have been constructed, with just one year of the plan period remaining.

Agreed that cost escalations and violence in the north eastern regions have led to delays in certain areas. But overall the consistency with which government projects fail to stick to deadlines is itself very discouraging.

For India's infrastructure needs to be met on time, we do need more private sector financing, facilitative policies and better liaison between the government and stakeholders. But most importantly we need supervision for the execution of the projects within the allocated timeline and budgets. Else no amount of domestic or foreign money (FDI) can help resolve India's infrastructure bottlenecks.

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Feb 22, 2018 (Close)