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Budget falls short for infra
The $494 billion question being raised after Palaniappan
Chidambaram hugely populist and successful budget - an economic
effort with an eye on the coming elections - is what is in
for infra? Admittedly infrastructure so crucial for India
has also received attention, across the range of sectors -
highways, power and the integrated rural and urban infrastructure
missions. The overall availability of resources for these
sectors has been enhanced by tapping into extra-budgetary
resources, which opens up the opportunity for private participation
and market discipline.
Unprecedented robust growth in the last half-decade despite
inadequate infrastructure underlines the urgent need for speed
in meeting large infrastructure requirements of the nation.
The service and industrial sectors' ability to overcome major
infrastructure bottlenecks so far has resulted in an average
8.7 per cent growth in the period. Of course, had growth in
infrastructure over the past few years been faster, the overall
rate of growth would have notched up even more. But is this
sustainable? Perhaps not, as the opportunity cost of lack
of sufficient infrastructure could be as severe as loss of
competitiveness for business of all sizes in every segment,
due to high transaction and transport costs. Moreover, it
diminishes domestic business climate and impedes accessibility
to domestic and international markets. But how far has this
year's budget gone to address this requirement? Despite repeated
focus on lack of infrastructure over the last few years, Union
Budget 2008-09 fails to provide adequate thrust to the sector.
Although the total plan outlay has increased by 23 per cent
over that of last fiscal year's and 29.5 per cent higher than
revised estimates of 2007-08, budgetary support has been notched
by a mere 6 per cent. Much of the increment will come in from
internal and extra. This rise is concentrated in the Ministries
of Railways and Power.
However, some new initiatives have been undertaken in few
sectors. The critical social sectors, namely, health and education,
have also received considerable attention in the Budget. However,
in proportionate terms, the increases are not very different
from previous years and the old problems of using decrepit
delivery mechanisms will continue to hinder achievements in
these sectors.
This issue's cover story also takes a look at the lack of
progress made in the aviation sector despite proclamations
and political grandstanding. While the about to be launched
new generation airports at Hyderabad and Bangalore - Bengaluru
for the politically correct - are exemplars in themselves
the absence of supporting infrastructure is seen as a major
dampener as also the dillydallying over the long delayed Aviation
policy.
The annual Ecobuild Exhibition, Seminar and Conference held
at Earl's Court in London has successfully thrown light on
issues of sustainability in the built environment and innovative
Green building techniques. Executive Editor Shrikant Rao was
there to cover this year's event for our group publications
and his verdict, "Impressive, but still a long way to
go."
Have a profitable read!
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