Developing adequate infrastructure is a critical prerequisite to sustain economic growth. Recent studies indicate that 1 percent increase in physical infrastructure can raise India’s GDP by 1-2 percent.
Speeding up infrastructure delivery requires extensive reforms including bidding, financing and project execution. The major challenge for the sector today is access to funds, which has stalled several projects, put many others on the backburner, and significantly diminished interest in new bids. Adding to sectoral woes is the mounting number of unresolved arbitration matters.
On a positive note, certain infrastructure areas are witnessing increasing traction, including roads and highways, where strong investor sentiment is driving growth, and the power sector, which is advancing rapidly on the back of renewable energy. EPC companies, too, have shown a sharp positive turnaround.
The Government, on its part, has taken a host of measures to provide relief to the sector and improve the ease of doing business. CII has been pursuing active policy advocacy to improve the Industry’s cash flow and productivity. However, some implementation bottlenecks need urgent attention.
This edition of the CII - Policy Watch has been prepared in this context, with special focus on infrastructure, capturing the views of Industry stalwarts and highlighting some immediate issues that need prioritised policy intervention.