To hit the ground running you need to steer the industry around many obstacles. One of them is the land acquisition bill. If one can push article 254 into zones which are a hindrance in implementation of infrastructure projects, then the states will get the President´s assent over the Centre´s policies.
Further there are low hanging fruits in the form of:
Projects which are 90 per cent complete but stuck due to last mile connectivity, permissions, protests, etc. Projects which have obtained financial closure but are stuck due to permissions. Here the Project Monitoring Group has been reasonably successful in the last three months. For projects stuck due to arbitration, a fast track arbitration court can serve to release over Rs 25,000 crore into the system.
The single biggest failing that led infrastructure growth to languish despite a good start was the lack of transparency. When natural resources like mines, energy, rights to allow people to travel etc are auctioned in an unfair and non-transparent manner, the right to demand accountability and audit is also lost leading to sub-standard use of resources and the creation of sub-standard assets. Every such decision should be made transparent right from its inception. The lack of transparency precedes the loss of credibility. In such situations, foreign investors prefer to stay miles away. Infrastructure is an enabler. This is one area where we need to attract maximum FDI. Attracting FDI in building infrastructure is a supreme need of the hour. In order to build credibility apart from transparency and consistency in policy, the government needs to incubate projects and bring a bank of projects on offer with all government permissions ready. Each state should create its own bank of projects with complete ´permission granted´ status.
Roads is one area where the government machinery is fairly experienced in all possible outcomes of PPP and should be able to kick start the roads program in a big way. Further concretisation of roads is a sure-shot way of ensuring that India remains firmly connected. Not only would roads require lesser maintenance but cement capacities will be utilised well. A life cycle cost analysis indicates that it is the more cost effective way forward too. Railways is a vital link for inclusive growth.
The Delhi-Mumbai Industrial Corridor, the river-interlinking plan, mini-hydro projects, last mile grid connectivity and agri-warehousing capacity; all need a boost. Lastly, construction contributes 8 per cent to the GDP, employs over 35 million people and is a sure trigger for creating an economic multiplier.
Mr Modi, the growth in GDP during the first three years during your tenure will be a reflection of the speed with which you get the existing projects, which are in execution stage, completed. You may set processes so that these do not get derailed but new projects which you conceptualise now will struggle to be completed by the end of your first term. So you need to plan for two terms for sure as the benefit of your vision will truly manifest in your second term. Having said that I also believe that there is great power in our bureaucracy which will need more than words of encouragement. If you can harness this by invoking their sense of accomplishment without fear of a witch hunt, then you can change the model from being ´create, procrastinate´ to ´create, execute, audit´.
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