Infrastructure sector constitutes the backbone of an economy. There exists a strong linkage between the development of infrastructure and progress of a nation. This means that the growth of a country, must not only be preceded, but also be accompanied and followed by the continuous availability and upgradation of appropriate infrastructural services. In other words, infrastructure is a pre-condition for sustaining the overall prosperity of a country. Also, existence of sound and efficient infrastructural facilities, through their backward and forward linkages, have a tremendous impact on the quality of life.
In India, the six core infrastructure industries having a direct bearing on the infrastructural sector are crude petroleum; refinery products; electricity generation; coal; cement; and finished steel. The index of these infrastructural industries (having a combined weight of 26.7 per cent in the Index of Industrial Production), stood at 219.9 (provisional) and registered a growth of 7.2% in February 2007.
Development of efficient, low cost, quality infrastructure involves high upfront costs and long gestation periods. This makes adequate flow of private investment into the sector a necessity. Accordingly, various reforms in the form of policy measures have been undertaken by the Government. These include liberalized rules and regulations; a series of tax incentives and concessions; simplified procedures; etc, in order to provide an enabling environment conducive for private participation. The setting up of the Committee on Infrastructure (CoI) has been a major step in this direction. It has been constituted with the following objectives :-
- Initiating policies that ensure time-bound creation of world class infrastructure;
- Developing structures that maximize the role of public-private partnerships in the field of infrastructure;
- Monitoring progress of key infrastructure projects to ensure that established targets are realized.
In order to bring in private sector resources and techno-managerial efficiencies, and thus bridge the infrastructure deficit in the country, the Government is also pursuing 'Public Private Partnerships (PPPs)'. The PPP projects involve long-term detailed contracts between the Government and the private parties spelling out the rights and obligations of both the contracting parties. Such public-private partnership encourages better risk sharing, accountability, cost recovery and management of infrastructure.
The infrastructural facilities broadly cover, the services of transportation (railways, roadways, ports, aviation); power generation, transmission and distribution; telecommunications, etc.