In­fra­struc­ture & Con­struc­tion

India Today - - COVER STORY | JOBS -

SPEND­ING 10% of gross GDP CON­TRI­BU­TION TO GDP 24% TO­TAL JOBS 36 mil­lion (ap­prox.) CHAL­LENGES

There is a dis­tinct slow­down in some sec­tions of the in­fra­struc­ture sec­tor. While ar­eas like power, bridges, dams, roads and ur­ban in­fra­struc­ture de­vel­op­ment have shown an in­crease in the or­der books, the sever­est slow­down has been ob­served in the ther­mal en­ergy sec­tor.

There are sev­eral pro­cess­re­lated de­lays con­tribut­ing to the slow­down in this sec­tor— for in­stance, land ac­qui­si­tion de­lays, slow pre-ten­der­ing process.

On av­er­age, con­struc­tion and in­fras­truc­tural pro­jects have suf­fered from time and cost over­runs in the 2025 per cent range. In some cases, that goes up to 50 per cent. Other prob­lems re­late to weak dis­pute res­o­lu­tion pro­cesses and in­ef­fi­cient per­for­mance man­age­ment.

Slow progress on the Pub­lic-Pri­vate part­ner­ship model.


There has been a sub­stan­tial in­crease in the or­der books of com­pa­nies that are work­ing in cer­tain sec­tors, in­clud­ing rail­ways, roads, elec­tric­ity trans­mis­sion and dis­tri­bu­tion, ur­ban in­fra­struc­ture and ir­ri­ga­tion.

Over the last cou­ple of years, mid-cap con­struc­tion com­pa­nies have seen their or­der books grow 2.5 times their turnover.


The gov­ern­ment chose the right strat­egy—push­ing pub­lic ex­pen­di­ture in 2015-16. But that alone can­not fill the short­fall of pri­vate in­vest­ment. Pub­lic-pri­vate part­ner­ships should be en­cour­aged.

The fi­nance min­is­ter had an­nounced an in­sti­tu­tion— 3P In­dia—with an al­lo­ca­tion of Rs 500 crore to help in main­stream­ing pub­licpri­vate part­ner­ships. The Kelkar com­mit­tee has also made its rec­om­men­da­tions on re­vis­it­ing and re­vi­tal­is­ing the PPP model.

There is no fear of au­to­ma­tion dis­plac­ing jobs, but re­cov­ery could take three to five quar­ters—ca­pac­ity util­i­sa­tion has to go up from the cur­rent 60-65 per cent.

Vi­nayak Chat­ter­jee Chair­man, Feed­back Infra

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