This Paper was amongst top-10 winning entries in "Opsyrus 2006", the CoolAvenues.com - OIG (IIM Lucknow) Paper Writing Competition held during Oct-Dec 2006.

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Executive Summary

The importance of infrastructure for sustained economic development is well recognized. High transactions costs arising from inadequate and inefficient infrastructure can prevent the economy from realizing its full growth potential regardless of the progress on other fronts.
Physical infrastructure covering transportation, power and communication through its backward and forward linkages facilitates growth; social infrastructure including water supply, sanitation, sewage disposal, education and health, which are in the nature of primary services, has a direct impact on the quality of life. The visible signs of shortfalls in capacity and inefficiencies include increasingly congested roads, power failures, long-waiting lists for installation of telephones and shortages of drinking water illustrate the widening gap between demand and supply of infrastructure and also raises questions concerning the sustainability of economic growth in future.

The efficacy of private sector participation in infrastructure development would be contingent upon the capability to commercialize these projects whereby recovery of investments would be through a system of user charges. There is a potential for public private partnerships (PPPs) to contribute more and help bridge the infrastructure gap in India. There has been considerable progress in the last ten years in attracting private investment into the infrastructure sectors; first in telecommunications, then in ports and roads, and in individual projects in other sectors.

With the current GDP growth of 8%, in which there is contribution of nearly 51% from services and 16% from manufacturing sector there is a need for proper alignment of resources. To sustain this growth India needs to develop sound infrastructure so that the right input of skilled, qualified and socially contented labor; visible and reliable supply chains; prompt and accurate information for decision making; efficient process and updated technology can be given to the operations of manufacturing and services.

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* Contributed by: -
Jayant Trivedi & Saloni Gaba,
SIOM, Pune.