The infrastructure sector comprising of transportation, communications, electricity and other services constitutes the backbone of any growing economy. Supply bottlenecks of critical services can severely hamper growth and development. The Tenth Five Year Plan has targeted an annual growth of 8 per cent in GDP over 2002-07 as compared to the average of
5.6 to 5.7 per cent recorded during the eighties and nineties. However, further acceleration
of growth requires significant investments in infrastructure. The energy-transport infrastructure, in particular, will be a major determinant of an acceleration in GDP growth.
According to the Tenth Five Year Plan, the cumulative investment requirement during
2001-02 to 2005-06 has been estimated at US$ 156 billion. Of this, 40 per cent is required
in the power sector, 11 per cent in telecom and around 14 per cent in roads and railways.
With US$ 38 billion already invested between 2001-02 and 2002-03, there still exists a target
of US$ 118 billion to be met over the next three years. All the infrastructure sectors need sufficient funds for expansion and maintenance of existing facilities. To address this need as well as improve efficiency, a number of policy measures have been initiated recently. In order to create an adequate provision of various public goods, the Government has changed its role from direct producer of public goods and focuses on facilitating and encouraging public-private partnership, including Foreign Direct Investment. This effort has borne fruit over the last five years. According to a World Bank report, India was amongst the top ten developing countries to receive private participation in infrastructure projects worth US$ 27.7 billion (in 2001). Changes have also been initiate ...