Dr. Mike Marzano
February 21, 2013
Infrastructure in India
India’s port, road, and rail networks need massive capital investment. The ports in India are operating beyond their intended capacity in spite of the construction of a number of new sites. Moreover, there are bottlenecks when clearing goods from customs: the time required to clear goods in India is twice that of South Korea and Thailand and three times that of the average for members of the Organisation for Economic Co-operation and Development (OECD). Since most ports are overstretched and the time taken to obtain customs clearance is quite long, companies in India hold large inventories. Poor road …show more content…
Infrastructure is seen as a key weakness for India when compared with China and other peer nations. Poor roads, ports, and railways are commonly viewed as a key factor preventing India from achieving the high growth rates seen in China and other East Asian nations over the past decades. Multiple governments have attempted to close this deficit but progress has often been held back by red tape and corruption among public officials as well as protests by locals, which have caused severe delays and cost overruns to infrastructure projects, thus discouraging participation by private sector partners.
Without substantial improvements to the country's infrastructure, growth beyond India's long-term trend (at roughly 7.5%) will be difficult to achieve. This now appears to be recognized by the ruling United Progressive Alliance government, which has made public infrastructure investment a key priority following its victory in the April-May elections.
Investments in infrastructure are projected at $500 billion during 2009–13. This will add significant impetus to industrial and capex (capital expenditure) growth, along with overall growth in the services sector. India registered investments of around $3 billion during 2008 in various infrastructure projects and private players are displaying a keen interest in infrastructure development. In