Public Sector Planning [Focus- Infrastructure]

1
Public Sector Planning Focus- Infrastructure

• Public Sector Planning in India has been changing
  its face from time to time, from non-existence to
  dominance and from dominance to coexistence with
  rapid privatization
• The initial 5-year plans gave ample importance to
  development of infrastructure and industries in
  the public sector.
• This continued till early 1990s and then the
  process of reversal began.
• It is not that the expenditure in the public
  sector has gone down. In fact, it has been
  steadily increasing. But government has been
  divesting its holding in most of the public
  sector undertakings and focusing more on
  infrastructure development.
• Focus- Railways, Electricity, Telecom, Drinking
  Water, Housing, Road
• Rapid Framework Analysis

2
Railways

• A study of plan outlay for transport sector and
  railways clearly indicate that the Railways
  share as a percentage of the total transport
  share has come down from 53 to 37.
• What should be the role of railways in the total
  transport scenario?
• Despite the Railways being fuel efficient and
  environment friendly should we allow its
  marginalization by progressively reducing its
  share in the plan funds

3

• In the investment policy for the next 5 to10 year
  period a large role has been assigned to Public
  Private Partnership (PPP)
• Railway has become a symbol of national
  development. People have
• been requesting for new railway lines, gauge
  conversions, doubling of tracks and
  electrification, etc., and their aspirations
  are articulated by their elected representatives,
  both inside and outside the Parliament.
• What should be the mechanism for funding social
  projects? Should they be funded directly through
  the General Exchequer without any dividend
  liability? Should there be participation of state
  governments and to what extent?

4
Electricity
Fuel MW age
Total Thermal 86,935.84 64.5
  Coal                                          71,932.38 53.4
 Gas                                             13,801.71 10.2
OIL                                         1,201.75 0.9
Hydro 33,775.76 24.8
Nuclear 4,120.00 3.1
Renewable 10175.03 7.6
Total 1,35,006.63
52.3 contributed by State Sector, 34 by central
sector and 13.7 by private sector, as on July
31st, 2007.
5

• MAJOR PLAYERS
• Public Sector NTPC, National Hydro
  Electric Power Corporation, Nuclear Power
  Corporation
• Domestic Private Sector Tata Power, RPG
  Group CESC, Reliance Energy
• International Private Sector China Light
  and Power (CLP), Marubeni Corporation
• STRENGTHS
• Abundant coal reserves (enough to last 200
  yrs)
• Vast hydroelectric potential (150,000 MW).
• Emergence of strong and globally comparable
  central utilities (NTPC, POWERGRID,)
• Further Renovation, modernization and up -
  rating of old thermal and hydro power plants will
  add to the production.

6
Power Sector Reforms and Policies

• 100 FDI permitted in Generation, Transmission
  Distribution
• Each State has its own Electricity Regulatory
  Commission.
• The Projects focused under AGSP (Accelerated
  Generation Supply Program (AGSP) during the
  10th five year plan period were for Renovation,
  modernization and up - rating of old thermal and
  hydro power plants at concessional lending rates
  with interest subsidy upto 3 provided by
  Government of India
• The National Electricity Policy aims at making
  electricity available for all households in next
  five years i.e demand to be fully met by 2012.
• Under rural electrification, against a target of
  10,000 villages to be electrified, 9,819 villages
  were connected in 2005-06. However, the next two
  years will be crucial for the Bharat Nirman
  programme, as the target for electricity coverage
  has been hiked to 40,000 villages per year.

7
Telecom
8
Telecom Policy

• India -5th largest telecom services market in
  world ( 17.8 bn by 2005)
• Telecom market grown about 25 over last 5 years
  (Wireless segment-85 p.a. fixed line- 10
  p.a.)
• Indian telecom market has both public private
  sector companies (Public sector-43 market share
  from over 90 in 2000)

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• 74 to 100 FDI permitted for various telecom
  services
• Zero-Customs duty on all import of component and
  raw
• materials required for manufacturing telecom
  equipment.
• FIPB (Foreign Investment Promotion Board)
  approval
• is needed for FDI exceeding 49 in all telecom
  services.
• 100 FDI permitted in telecom equipment
  manufacturing
• Indian telecom policy aims to encourage both
  private
• foreign investment.
• TRAI an independent regulator

10
Major Players Presence in value chain
Company Services Services Services Services Investor
Cellular Basic NLD ILD
Bharati Televenture Vodafone, Singapore Telecom, Warburg Pincus
Reliance Infocomm Reliance Group
Tata Indicom Tata Group
BSNL GOI
Hutch Essar Hutchinson Whampoa, Essar Group
IDEA Cellular ATT, Tata Group, Birla Group
11
Drinking water

• State subject
• Assisted by Centre through schemes like ARWSP,
  Rajiv Gandhi National Drinking Water Mission,
  Bharat Nirman, etc.
• Opportunities
• Renew old schemes which are dying by giving them
  new life through proper assistance.
• Revive the traditional sources/ encourage
  rain-water harvesting.
• Providing the regional schemes from alternative
  safe sources by extending new pipelines.
• And many more.

12
What does Bharat Nirman have in store for Water?

• Intensive co-ordination among the States.
• Geo-techno-economic studies of the regions.
• Turnaround till-date failed/ no-functional
  schemes with proper administrative intervention.
• Identifying and developing new low-cost
  technologies.
• To bring in sustainability, bring in institutions
  like PRIs.
• Regulate over-exploitation of water by building
  recharging structures.
• Compile and circulate the best practices in the
  drinking water sector.

13
HOUSING

• A new National Housing and Habitat Policy 1998
  has been formulated which was approved and laid
  before the Parliament on 29.7.1998. The
  objectives of the policy are to facilitate
  construction of 20 lakh dwelling units each year
  with emphasis on the poor.
• Scheme of Night Shelter and Sanitation
  Facilities for the urban footpath dwellers is
  being implemented as a centrally sponsored scheme
  in the metropolitan and other major urban
  centres.
• A sum of Rs.1600 crore has been provided as
  central outlay in 1998-99 (BE) for rural housing
  with a target to construct 923908 houses under
  the Indira Awas Yojana (IAY) in the current year
• Government has decided to allow FDI up to 100
  under the automatic route in townships, housing,
  built-up infrastructure and construction-developme
  nt project

14
Road

• The last government initiated ambitious road
  projects for development of highways, rural roads
  and link roads.
• The Pradhan Mantri Gram Sadak Yojana provides for
  linking up of all the inhabited pop.-1000, 500
  for tribal villages villages.
• To connect them, over 145000 km of road will be
  built.
• In addition, approximately 2 lakh km of road will
  be upgraded in order to establish full farm to
  market connectivity.
• Requires investment of more than Rs 48000 crores.
• The quadrilateral project aims at linking the 4
  major metropolitan cities- Delhi, Kolakata,
  Chennai and Mumbai. The total road length under
  this project is 5846 km out of which 5590 km,
  i.e. over 95 has already been completed.
• About 65 of freight and 80 passenger traffic is
  carried by the roads.

15
Rapid Frame Work

• Context-
• key policy actors -Government, Political Parties,
  Private sector, Civil Services Organisations,
  Citizens, International Bodies, Governments of
  other countries
• sources of resistance to evidence based
  policymaking -The populist policies of the
  political parties and the collusion of business
  houses with the various key actors
• Evidence-
• current theory -The state should divert its
  attention from the productive process and allow
  more public private partnership in the planning
  and implementation process
• experts - The members of Planning Commission, the
  researchers of the Centres for economic or policy
  research, the academia
• Link-
• roles they play- researchers, intermediaries and
  implementers of the policy
• Whose evidence and research do they
  communicate?- They communicate the research and
  evidence gathered by the government owned or
  sponsored research centres mainly. Some of them,
  who are critiques of the policy, may also source
  their evidences from CSOs etc.
• External Environment-
• main international actors -WTO, the World Bank,
  IMF, UNO, SAARC, OPEC, NAM, Governments of other
  nations, multi-national companies and CSOs.
• overarching economic, political or social
  processes -Economic trends that are overarching
  are those that encourage Privatisation, political
  trends that support Coalitions and social
  processes that try to imbibe the best practices
  prevalent in other nations, which appeal to the
  structures within which our society functions

16
Thanks!

• Please join us in discussion.
• Learning Group- 9
• Ipsita Das
• Murli Manohar
• Purnendu Bikash Giri
• Richa Rai
• Shyam Dayal Singh
• Vivek Kumar