infrastrucre delays cause pain to india

Arrest crippling delay
The delay in completing public infrastructure projects in India is nothing new. What is new is the staggering scale of the delay as well as the fact that with the recent increase in commodity prices the cost of these delays are piling up too unsustainable levels. The delayed projects also come with a huge opportunity cost. A delayed port or a highway programme can put breaks on economic growth and cause the economy to overheat.
According to a recent report ministry of statistics and program implementation Out of these 605 projects, around 248 projects are way behind schedule. Another 149 projects, though approved, have not even been commissioned, and 46 other projects are waiting for the updating of their completion schedule. Merely 22 projects are ahead of schedule, while 14 are on schedule. A staggering 105,000 crore has already been spent on these projects and the delays cost an average of The overall cost overrun with respect to original cost is calculated on an average to be 21.5 per cent.
The worst performers are sectors such as nuclear energy, Hydropower generation, Indian railways and ministry of health and family welfare. The delays are a symptom of comprehensive governance failure. The political structure of a parliamentary democracy in India also leads to many pork barrel projects where costs are exaggerated from the inception stage. Powerful MP’s often insists on mega projects n the vicinity of their power base irrespective of the feasibility of the project. There is urgent need to tighten the feasibility study criteria for government-funded projects.
Lessons also need to be learned by the babu’s from the private sector in project execution. Whether it is the Reliance refinery at Jamnagar or the Delhi metro port large time bound project are now being executed with much greater efficiency by the private sector.
A public private partnership model for project execution ought to be a top governmental priority. A vast engineering pool needs to be created for flexible project management. Some of these ideas have been mooted by the planning commission in the past but never taken forward in a concrete executable format. India can ill afford ignoring such an initiative
division has 605 projects worth Rs 267,815 crore (Rs 2,678.15 billion) on the monitoring system on which Rs 105,146 crore (Rs 1,051.46 billion) have already been spent.
Out of these 605 projects, around 248 projects are way behind schedule. Another 149 projects, though approved, have not even been commissioned, and 46 other projects are waiting for the updating of their completion schedule.
Merely 22 projects are ahead of schedule, while 14 are on schedule.
The overall cost overrun with respect to original cost is 21.5 per cent, mainly because of delays, which range from one month to 13 years!

china changes investmnet rules for foreigners

Red storm rising
By ninad d sheth
China the sleeping giant invoked by Napoleon’s famous dictum woke up long ago. Now it is changing tracks in a manner that may prove to be a wake up call for the emerging markets and the G-8 alike. The changes in policy may lead to the undoing of the well-known flat world thesis by Thomas Freedman. A lot is at stake as China changes track from foreign funded to domestically driven economy.
On the one hand, China is unleashing a fresh set of measures that restrict foreign investment directly into the corporate sector, and on the other hand it is leveraging its treasure chest of $1.2 trillion foreign reserves through a sovereign fund that will invest in overseas assets.

Three measures to restrict foreign investment could change the global capital flow matrix. Firstly, Sectors where Chinese firms must have majority ownership are proposed to be tripled from the current shortlist. Thus a new investor may find himself unwelcome in several sectors that where hitherto open.
In manufacturing in particular, new restrictions are applied to ownership of factories that manufacture finished goods exclusively aimed at the export markets. Currently, according to an HSBC report foreign entities fully own 300,000 factories in China that produce everything form toys to machine tools. The fact that non-Chinese own such huge assets in China has already caused social disharmony. In the flat world, ownership was supposed to be irrelevant as long as the people get the jobs and growth was triggered through interlinked globalised exports. Except the Chinese want all that - and more. Chinese are yarning to own assets. Just as a contractor would one day like to be the supplier in a market place so are the Chinese ready to move up the ladder and its bring policy measures to ensure the transition.

Proposals are underway for press note one with Chinese characteristics. New measures have been introduced for joint ventures that will have to get through the first right of refusal.
Financial curbs are the third factor that will restrict globalization as we know it. In China foreign Banks are finding it difficult to open branches and consolidate. More licensing is likely in the financial sector in China.
In sum the Chinese are turning away for the model that fuelled their growth for the last twenty-five years. And all this while the Chinese sovereign fund merrily takes up stakes in such American majors as the hedge fund Blackstone. Globalization as we know it may just end up getting some Chinese characteristics.