Growth of Infrastructure in India.

Introduction

• Defined as a set of activities through which goods and services are provided to public.

• Definition keeps on evolving with time. • It is fluid. (e.g. irrigation, fibre optic)• Does not produce goods and services but provide a suitable

environment for the production.

Infrastructure Growth in India

• Progress of primary and secondary sector directly depends upon infrastructure.

• Ensures synergy through backward and forward linkage providing strong base.

• Indian Government taking every possible step.• RBI notified 100% FDI in

construction development sector. (Automatic Route)

• Has relaxed rules regarding FDI, liberalized the exit norms.

Bottlenecks To Infrastructure Development

• Meeting the needs of burgeoning population.• Inhospitable Business Environment for infrastructure

investors.• Indiscriminate Urbanization.• Reforming Infrastructure Financing.• Attracting foreign investment.• Speedy implementation of Projects.• Environmental Clearance Policy to be Articulate.• Co-ordination between Government Agencies.• Short Tender Process.

Meeting the needs of burgeoning population.

• Indian population- 1.2 billion.• Population places demand on infrastructure.• Hence infrastructure faces pressure.

Inhospitable Business Environment for infrastructure investors.

• Plagued by certain problems like unpredictable regulations, bureaucratic delays, struggles to secure land rights, corruption, low transparency and labour laws.

Indiscriminate Urbanization.

• Rapid and unbalanced urbanization.• 590 million people will shift to cities by 2030.• This unbalanced growth puts a pressure on the

infrastructure and also leads to governance issues.

Reforming Infrastructure Financing.

• Large funding gap in 12th 5 year plan. (Rs.14,60,870 cr.)

• Hence immediate challenge to introduce reforms in infrastructure financing.

Attracting foreign investment.

• Ending of 12th year plan, 47% of infrastructure share would be with private sector.

• New potential investments-1. China.2.Japan3.US

Speedy implementation of Projects.

• Infrastructure projects get delayed due to land acquisition.

• Solution- Land acquisition be done by the government prior to the project bidding stage and project commences only after land acquisition.

Environmental Clearance Policy to be Articulate.

• Major roadblock- Government does not have clear and well defined environmental clearance policy.

• Solution- Suitable bodies or independent consulting companies should be fostered to help bidders get clearance at a faster pace.

Co-ordination between Government Agencies.

• Currently 7-8 clearances are required to set up power projects.

• Situations in other sectors equally grave.• Takes about 1.5-2 years.• Solution- Single window

clearance system withspecific guidelines for time bound approvals.

Short Tender Process.

• Reduction in time lag would reduce the project costs.• Rise in material costs due to inflation would also be

controlled.

Energy Policy Objectives

• Energy Access• Energy Security• Climate Change

Energy Demand and Supply Situation

• 68% India’s population in rural areas.• Increased population- Increased energy consumption• Commercial energy supply- Dependant on fossil fuels.• Renewable sources- Underutilized.• Energy sector dominated by Public sec tor.

Energy Mix

Coal

Renewable Energy

Petroleum

Power

Coal Energy

• Major source of energy in India.• 31.03.13 – Estimated reserves – 298.94 billion.• 40% of electricity worldwide is produced using coal.• India is third largest producer of coal.• It is the most controlled

sector as 90% is in the hands of public company.

1. CIL 2. SCCL

Initiatives of Government for Coal Sector

• The Coal Mines ( Nationalization) Act, 1973.• Colliery Control Order 2000.• New Coal Distribution Policy 2007.

Challenges

• Poor Quality.• Opencast Mining.• Poor Infrastructure.• Poor Technology• Monopolistic Nature.

Renewable Energy• It is energy obtained from resources that are indigenous and

inexhaustible. Example –wind power, solar power, Geothermal energy , tidal power and Hydroelectric power.

• It can be created without release of harmful pollutants.• India has abundance opportunities for using solar, wind and

small hydro resources to produce Energy.• India has land suitable to produce Bio Mass energy.• These energy resources also helps in reducing Global threats of

Climate change.• It will reduce country`s dependency on fossil fuels.• Renewable resources are Diffused and Decentralised which

helps to satisfy energy needs of rural people and it will also crate job opportunities.

Share of Different Sources in Total World Renewable Energy Consumption

SHARE OF RENEWABLE ENERGY CONSUMPTION IN TOTAL ENERGY CONSUMTION 16.7%

Share of different sources in Total Renewable Energy Share%

Biomass Heat 11.44

Solar Hot water 0.17

Geothermal Heat 0.12

Hydro power 3.34

Ethanol 0.50

Bio Diesel 0.17

Biomass Electricity 0.28

Wind power 0.51

Geothermal Electricity 0.07

Solar PV Power 0.06

Solar CSP 0.002

Ocean power 0.001

Core Drivers

1.Energy Security2.Elecricity Shortages.3.Energy Access4.Climate change5.Progress in India

Growth of Renewable Power Generating Capacity (Cumulative Capacity in MW)

Sector Beginning of X Plan (April 2002)

Beginning of Xi Plan (April 2007)

Begining of Xii Plan(April 2012)

Wind 1628 7092 17352

Small Hydro 1434 1976 3395

Bio Power 389 1184 3225

Solar 2 3 941

Total 3453 10255 24914

Government InitiativesRenewable energy has been an important component of India`s Energy planning Process since Quite some time .The importance

of renewable energy sources in the transition to a sustainableBase was recognized in the early 1970`s. Setting up of Commission for Additional Sources of Energy

(CASE) Department of Non-Conventional Energy Sources(1982) Indian Renewable Energy Development Agency (IREDA) Ministry of Non –Conventional Energy Sources Ministry of New and Renewable Energy (MNRE) The National Solar Mission.

Setting up of Commission for Additional Sources of Energy(CASE)

• The two oil shocks in 1970 led to the establishment of CASE in Department of Science and Technology in March 1981.

• This commission was charged with responsibility of Policy formulation and their implementation programme for development of new and Renewable energy

• It also helps in coordinating and intensifying Research and Development in the sector.

Department of Non-Conventional Energy Sources (DNES)

• In 1982 a new Department was created in the Ministry of Energy .

• It incorporated CASE.

Indian Renewable Energy Development Agency (IREDA)

• This was crated in 1987 to finance renewable energy projects.

Ministry of Non-Conventional Energy Resources

• In 1982 DNES become Ministry of Non-Conventional energy resources

• In october2006 this Ministry was Rechristened as the Ministry of New and Renewable energy

• KEY OBJECTIVES;- promotion of deployment of Grid –interactive renewable power

generation projects. Promoting energy initiatives for:- Meeting energy needs of rural people Supplementing energy needs in urban areas industry and commercial

establishments. Research design and development

Encourage development of a Robust manufacturing Industry.

• Functions:- Policy and regulatory framework Fiscal and financial incentives Human Resource Development Fostering International Cooperation Information , Publicity and Public Awareness Supporting Research and Development Undertaking resource assessment and Potential estimation Other special Incentives.

The National Solar Mission• Aims to promote the development and use of solar energy

for power Generation .• OBJECTIVE:- To reduce the cost of solar power generation through:- Large scale deployment goals Aggressive R and D Domestic production of Critical Raw material , components and equipments

• Schemes:- Scheme for setting up of over 300 MW of Grid connected Solar PV

power projects by Defence Establishments Scheme for setting up 1000MW of Grid Connected solar PV power

projects Scheme for setting up of solar parks and ultra mega solar power

projects

Grid connected solar PV power projects Pilot-cum –demonstration project for development of grid connected

PV power plants

Incentives offered by Govt. Of India• For development of Solar Energy Sector:- Exemption from Excise duties and concession on import duty. A 10 year tax holiday Wheeling ,banking and third party sales , buyback facility by

states Guaranteed market GBI schemes for small solar projects Reduced wheeling charges Special incentives for exports from INDIA Loans at concessional rates

• For Biomass Power Projects:- 80% claim of depreciation in the first year A 10 year income tax holiday

Concession on custom duty and exemption from Excise duty Exemption from sales tax Financial incentives from IREDA

• For Small Hydro Power Projects:- Preferential Tarrifs Financial incentives Subsidy to upgrade watermills Custom duty concessions A 10 year tax holiday

Challenges

• Land Acquisition• Water shortage

POWER• Power is the main input in all the Economic activities be it

Agriculture , Industry or other commercial Business and is equally important for Domestic Lighting

• India`s power sector is experiencing the Growth • Power is the main source of energy and GOI is making many efforts to

improve this sector POWER SECTOR OUTLAYS (crores)

PLAN PLAN OUTLAY ACTUAL EXPENDITURE %

Eight plan 79589 76677 96.3%

Ninth Plan 124225 114008 91.8%

Tenth Plan 205021 182380 88.9%

Eleventh Plan 473745 388531 82.0%

Twelfh Plan 960425 N.A. -

• Sources of Power in India :- 1. Thermal power2. Hydro power3. Renewable sources4. Nuclear power INSTALLED GENERATION CAPACITY (MW) FROM 2006-07 TO 2012-13

YEAR TOTAL CAPACITY THERMAL HYDRO RENEWABLES NUCLEAR2006-07 132329 86015 34654 7761 39002007-08 143061 91907 35909 11125 41202008-09 147965 93725 36878 13242 41202009-10 159398 102454 36863 15521 45602010-11 173626 112824 37567 18455 47802011-12 199877 131603 38990 24503 47802012-13 223343 151530 39491 27542 4780

Within the Thermal sector coal has been a dominant fuel which account for about 85%OF THERMAL POWER capacity share of diesel is approx. 0.8% and gas been approx. 13%

INSTALLED THERMAL GENERATION CAPACITY (MW) from 2006-07 to 2012-13 YEAR total Coal (steam) Gas Diesel

2006-07 86015 71121 13692 1202

2007-08 91907 76019 14686 1202

2008-09 93725 77649 14877 1200

2009-10 102454 84198 17056 1200

2010-11 112824 93918 17681 1225

2011-12 131603 112022 18381 1200

2012-13 151530 130221 20110 1200

Generation of Power in India

Source wise share in Total Generation in 2006-07 and 2012-13

sector 2006-07 2011-12

Hydro 113502(17%) 130511(14%)

Steam 461794(69%) 612497(66%)

Diesel 2539(0.4%) 2649(0.3%)

Gas 64157(10%) 93281(10%)

Nuclear 18802(3%) 32287(4%)

Renewable 9860(1%) 51226(6%)

Initiatives by Govt.

1.Electricity (supply) Act ,1948 :- To facilitate faster development of power Sector

and State Electricity Boards are set up at level to ensure systematic growth of Power supply industry across the country . It was set up to rationalise production and supply of electricity and taking measures conducive to electrical development.

2. Private Power Policy 1991 : Under this policy private companies were allowed to

invest in:- thermal projects Hydro projects Wind and solar projects Foreign Investors were allowed to invest in projects

with 100% ownership with Govt. Approval.

3.Liquid Fuel Policy , 1995 :-o under this Policy Private Players were Permitted to set up

power projects using fuels like Naphtha and Fuel oil o Focus was to encourage the use of liquid fuel in power

plants.

4.Policy for Renovation and Modernisation of Existing Plants 1995:-

This policy was set up in order to modernise the Existing plants both through Public and private investment , and for modernisation purpose funds were also raised through traditional funding like from financial institution and external agency. The ownership of the renovated plant remained with SEBs

5.The Electricity Regulatory Commission Act,1998 :- this act focused on the establishment of Central

Electricity regulatory commission at central level and State Electricity Regulatory Commission at state level.

Commission has the power to determine and ratinalisation of tariffs subsidies etc.

6.Hydro Power Policy ,1998 :- the aim was to accelerate the development of

Hydropower.Idea was to set up vast Electric potential at faster pace with

supportive policies from the Govt.Aimed at promotion of small and mini hydro projects for

remote areasStrengthening the role of PSUs and SEBs in taking new

hydro projects.

7.Mega power policy ,1998:- its focus was on the development of projects with capacity

of 1000 MW and more ,which cater to the power needs of more than one state.

These projects are known as mega power projectsProjects were awarded through competitive biddingThis policy was revised in 1998 and after that it offer some

fiscal incentives as wellDue to which it create interest in private players to enter

into mega projects so to avail different benefits .

8.The Energy Conservation Act,2001 :- It was passed to enforce measures relating to energy

conservation :- Energy consumption standards Direct mandatory display of label Prohibit manufacture ,sale , purchase of notified equipment and

appliances not conforming to energy consumption Standards Notifying designated consumers Establishing norms and standards for designated consumers.

9.The Energy Conservation (Amendment) Act,2010:- The Central govt. May issue certificate to those Designated

Consumers whose energy consumption is less than the prescribed norms and standards.

The Designated consumers whose energy consumption is more than prescribed norms and standards shall be entitled to purchase the Energy Saving Certificate

Prescribe the value of per metric ton of oil equivalent of enrgy consumed.

10. The Electricity Act , 2003 :- The main features of the act are as follows:- De-licensing of generation and permitted the captive generation

without restriction. Its also provides for the transmission , distribution and trading in

electricity with a license. The act empowered central Govt. To make region-wise demarcation

of the country The state govt. Required to unbundle State Electricity board Setting up State Electricity Regulatory Commission made mandatory An appellate tribunal to hear appeals against the decision of CERCs

and SERCs Metering of electricity supplied made mandatory Provisions related to theft of electricity become more stringent.

Initiatives for Rural Electrification

1.Rural electrification under Minimum Needs Program (MNP): It was started in 5th five year plan . Under this funds were provided as

Central assistance to the states in the form of partly grants and partly loans.

2. Kutir Jyoti Scheme :

it was launched in 1988-89 to provide single point light connections to households of rural families below the poverty line.

3.Pradhan Mantri Gramodaya Yojana (PMGY) :-

it was implemented in 2001-02 . Under this funds were provided to the states as Additional Central Assistance.

4.Accelerated Rural Electrification Programme (AREP): it was launched in the year 2003-04 . Under this interest subsidy of

4% was to be provided on loans availed by State Governments / power Utilities from Financial institutions for carrying out rural electrification program.

5.Accelrated Electrification of One Lakh Villages and One crore households:-

it was launched in 2004-05 . Under this there was a provision for providing 40% capital subsidy for rural electrification projects and the balance as loan assistance on soft terms.

6.Rajiv Gandhi Grameen Vidyutikaran Yojna (RGGVY):- I was launched in April 2005 to provide Access to electricity to all rural

households plus rural electricity infrastructure . It also focused on providing a free electricity connection for all the BPL households.

Issues faced by Power Sector

1.Shortage of fuel2.Delays in Clearances3.Regional concentration of power Generation4.Low operational Efficiency5.Lack of Private Investment6.Low tariffs

GROWTH OF TELECOMMUNICATIONS

SECTOR IN INDIA

TELECOMMUNICATION : exchange of information using electronic means

• India has the second largest telecom network in the world .

• This sector has grown at around 45 % per year since 2006 .

• Intense competition in this sector due to the entry of new players and expansion by existing players .

GROWTH OF TELECOMMUNICATION SECTOR

• Origin of Indian telecom sector can be traced back to 165 years .

• First operational land lines were laid by the government near Kolkata { Calcutta}.

• In 1947 , after India gained independence , telecom companies were nationalised .

• Indian telecom sector was entirely under the Government .

• In 1984, private sector was given an entry into this sector but only in manufacturing equipments.

• The actual evolution occurred when the Government seperated the Department of Post and Telegraph in 1985 by setting up Department of Posts and the Department of Telecommunications.

GOVERNMENT INITIATIVES

• National Telecom Policy 1994

NATIONAL TELECOM POLICY

• Was brought into existance to provide world class services to people.

• For increasing the availability of landlines to the people.

• To make telecommunication services cost effective .

KEY CHALLENGES

• Increasing consumer base• Unclear regulatory environment• Excessive competition • Spectrum availability• Creation of telecom infrastructure

Presentation on Infrastructure growth in transport sector

Submitted to : Submittedby Dr. Dr. Nisha Aggarwal Divya joshi

• Transport sector is important:

1 To facilitate agriculture and industry.

2 for overall development of economy.

3 for movement of men, material and machines.

4 significant contribution to GDP

Introduction

Types of transport

Road transport

• Principal means of transport • It is the oldest means of transport• It helps in developing the other means of

transport

Road transport in India

India has the second largest road network in the world

• National highways account for 1.7 % Of total network in India

• Double-lane highways constitutes the largest share of highways in India(40,658 km)

• As of April 2015, India has completed and placed in use over 24000, kilometers of recently built 4or6 lane highways

Merits of road transport

• Less capital outlay (cost of constructing, operating and maintaining roads)

• Door to door service (warehouse to warehouse)• Service in rural areas • Flexible service (alternative ways, if an y road is blocked)• Suitable for short distance• Lesser risk of damage in transit • Saving in packing cost• Rapid speed • Personal services(people have their own vehicles)

• Private owned vehicles (businessmen)• Suitable for perishable goods• Provides employment • Feeder to other modes of transport

Demerits of road transport

• Unsuitable for long distances• Not suitable for heavy goods • Irregularity (time is not fixed)• Risky • No uniformity in fairs• Seasonal nature• Slow speed• Lack of organisation(irregular, different fair prices,

seasonal nature)• Environmental concerns

Issues in Indian transport

• Inadequate infrastructure -majority roads are two-lane -less flyovers, underpasses, bypasses, bridges etc. - inadequate availability of alternative modes

LANE

• A division of a road marked off with painted lines and intended to separate single lines of traffic according to speed or direction

Indian highways American HIGHWAYS

• Poor quality of roads-unsurfaced (42.65%) - deficiencies in national highways i.e. inadequate capacity etc. -

• Overloading -no check on overloading of vehicles - overloading is permitted by issue of

special token

• Lack of trained manpower -lack of trained drivers - easy availability of licences

• Lack of adequate parking space

Mixed Traffic

Multiple check-posts - causes abnormal delays - no uniformity in rates of road taxes

• Lack of way side amenities• Lack of private participation• Lack of uniformity• Roadside encroachment

Higher fuel cost Increased number of road

accidents Polluting vehicles and fuels

-

RAIL TRANSPORT IN INDIA

• Worlds largest passenger carrier• Network spans more than 64,600 kms.• 3rd largest in world• Passenger traffic witnessed a CAGR of 5.2%

during 2008-13• Freight traffic registered a marginally lower

CAGR of 4.9% in same period.• Sector runs 12617 trains, carrying over 23

Million passengers daily connecting 7172 stations

• 7421 freight trains are run carrying about 3 million tonnes of freight every day

MERITS OF RAILWAYS

DEPENDABLE

BETTER ORGANISED

CHEAPER MODE OF TRANSPORT

IMPETUS TO AGRICULTURE DEVELOPMENT

GROWTH OF MARKETS & SPECIALISATION

CHECK ON THE FLUCTUATIONS OF PRICES

FLEXIBLE IN TERMS OF CARRYING CAPACITY

MOST HELPFUL IN CALAMITIES

EMPLOYMENT

ENCOURAGEMENT TO TOURISM

STRATEGIC IMPORTANCE

STRONG ENVIRONMENTAL FOCUS

SAFETYPUBLIC WELFARE

DEMERITS OF RAILWAYS

HUGE CAPITAL OUTLAY

INFLEXIBLE ROUTES

LACK OF DOOR TO DOOR SERVICE

MONOPOLY

UNSUITABLE FOR SHORT DISTANCE & SMALL LOADS

BOOKING FORMALITIES

NO RURAL SERVICES

UNDER-UTILISED CAPACITY

UNSAFE FOR FRAGILE ITEMS

ISSUES AND CHALLENGES

INADEQUATE INFRASTRUCTUREUNDER INVESTMENTPOOR SERVICE QUALITYUNMANNED LEVEL CROSSINGSCLEANLINESS AND CATERINGLAW & ORDER PROBLEMSSTIFF COMPETITION

LOW PRIVATE SECTOR PARTICIPATIONLOW OPERATING EFFICIENCYSOCIAL BURDENLAND ACQUISITION &CLEARANCES ISSUESNON- AVAILABILITY OF SEPARATE PASSENGER &FREIGHT LINESUNAUTHORISED VENDERSHIGH TARIFF RATESLIMITED NON-CORE BUSINESS

Allocation in union budget 2014-15

Urban metro projects- Rs.100 crore for Lucknow &AhmadabadLight rail systems in PPP mode- funding by VGF(VIABILITY GAP FUNDING)Diamond quadrilateral project of high speed trainsHigh speed bullet trains- Mumbai- Ahemdabad routeFreight corridors proposed on eastern and western corridors.

Rail- road competition and co-ordination

1.Causes of competition:Flexibility of time table to suit individual

requirementsProvision for door to door servicesNo booking hasselsLower operational costsFreedom of movement due to availability of

multiple routesSuitability for short distanceUnlike railways no social welfare obligations

etc..

2. Need for co-ordination:

To relieve severe trafficTo control increasing pollutionTo check accidentsLimits & constraints to expansion of existing road network

Ensure better returns on huge fixed investment

Check on wastageAll-round development

Measures adopted for co-ordination:

1.MITCHEL KIRKNESS COMMITTEE2.RAIL-ROAD CONFERENCE-19333.TRANSPORT ADVISORY COUNCIL-19354.MOTOR VEHICLE ACT,19395.COMMITTEE ON TRANSPORT POLICY AND CO-

ORDINATION-19596.NATIONAL TRANSPORT POLICY COMMITTEE-

19807.THE STEERING COMMITTEE ON PERSPECTIVE

PLANNING FOR TRANSPORT DEVELOPMENT-1988

8.TRANSPORT POLICY DEVELOPMENT COMMITTEE-2010

AIR TRANSPORT IN INDIA

The mobility of men and material by air is called air transport. It is the fastest means of transport.

It is very useful for long distances and saves time.

The parliament passed the Air Transport Corporation Act in 1953

under which the Indian Airlines Corporation was to run domestic services and Air India is to run

external services

Advantages of air transport

• Comfortable and quick Services• Lesser Infrastructure Investment• High speed• Short and Direct Route• Easy Access• Emergency Services

•Most Suitable For Carrying high value but light goods•Promotes International Trade•Promotes Tourism

• Very Costly• Small Carrying Capacity• Uncertain and Unreliable• Breakdowns and Accidents/Risky• Large Investment• Specialised Skill• Unsuitable for Cheap and Bulky

Goods• Legal Restrictions

ISSUES IN AIR TRANSPORT

• Higher Fuel Cost than International Bench Marks

• Higher Level of Taxes• Non availability of skilled personnel• Poor Intermodel Connectivity• Price sensitive market• High and growing debt burden

• India has too few airports• Infrastructure• Poor Aircraft Utilization• Barriers to Entry

WATER TRANSPORT

Water transport is one of the oldest means of transport in India

Over the years, there has been a considerable improvement in the construction, design, motive power, speed, safety, etc.

Small cost is involved in the construction and maintenance of waterways.

MERITS OF WATER TRANSPORT

• Lesser Infrastructure Investment• Cheap Mode• Low operational cost• Larger capacity• Flexible service• Suitable for heavy cargo• Safe

• Fuel Efficient• Environment FriendlyUseful during natural calamities• Helpful in Defence• Low Risk of Damage in Transit• Generates Employment

DEMERITS OF WATER TRANSPORT

• Slow Speed• Affected by seasonal weather conditions• Limited Area of operation• Unreliable• Risky• Unsuitable for Perishable Goods• Specialized Skill• Legal Restrictions• Affects Flora and Fauna

ISSUES IN WATER TRANSPORT

• High Operational Cost• Lack of Comprehensive Strategy• Poor Port Governance• Poor Rail Road Connectivity• Financial Constraints• Poor Incentives• High Cost of Fuel

• Working age of ships• Low Productivity• Dual Governance