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!

cut indian subsidies

Nectar in a sieve
The Prime Minister’s assertion that subsidies provided by the government of India do not reach the poor and are counter productive for their well being are a welcome sign for any cardiologist watching his political heartbeat. Apparently there is a stubborn reassertion of the reform spirit in his cardiogram. Perhaps the fact that the lecture was delivered at the institute of economic growth in the environs where the professor Prime Minister feels at home was something to do with his reform self resurfacing. As any sensible student of economics knows, in a pork barrel economy like India where pubic policy is hostage to the whims of clan oriented priorities, economic subsidies are dead on arrival.
Coming from the Prime Minister such candor is welcome. The Prime Minister has been candid and has admitted to, even with an election looming, a crisis in governance. The fact is that in any sphere from public distribution system to fertilizers to primary education and onto public health the deliverables on the money invested in subsidies are in terrible shape. The poor are being denied their due by an entrenched system of government functionaries and political patrons. The working of the Indian administrative services, the state and local level counterparts is nothing less than scandalous in its inability to deliver projected results. The reason for this is not far to seek when you allow the state to allocate who should get what - as apart from letting the market distribute the same, discrepancies are inevitable.
The flagship public distribution system is the real culprit. It leaks like a sieve. It has a pronounced urban bias and despite spending billions of dollars a year on the subsidy the Government does not give social return. The story is repeated across the subsidy domain.
The prime ministers statement should be a wake up call. Alas it is unlikely to be anything but rhetoric. As a background one may consider an earlier promise in August during the Independence Day speech where the PM promised an increase of $6 billion in agricultural sector spending. Without a serious re look at the governance issues and delivery problems involved with public policy subsidies in India the coming budget may remain more of the same. That would be a pity for his reform legacy and a tragedy for the Indian poor. .