Infrastructure In India 6f1r6e

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 investments1. China. 2.Japan 3.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 with specific 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

Petroleum

Renewable Energy

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 Security 2.Elecricity Shortages. 3.Energy Access 4.Climate change 5.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 Initiatives Renewable 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 sustainable Base 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 ing 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 power 2. Hydro power 3. Renewable sources 4. Nuclear power INSTALLED GENERATION CAPACITY (MW) FROM 2006-07 TO 2012-13 YEAR

TOTAL CAPACITY

THERMAL

HYDRO

RENEWABLES

NUCLEAR

2006-07

132329

86015

34654

7761

3900

2007-08

143061

91907

35909

11125

4120

2008-09

147965

93725

36878

13242

4120

2009-10

159398

102454

36863

15521

4560

2010-11

173626

112824

37567

18455

4780

2011-12

199877

131603

38990

24503

4780

2012-13

223343

151530

39491

27542

4780

Within the Thermal sector coal has been a dominant fuel which 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 2006-07

2011-12

Hydro Steam Diesel

113502(17%)

130511(14%)

461794(69%)

612497(66%)

2539(0.4%)

2649(0.3%)

Gas Nuclear Renewable

64157(10%)

93281(10%)

18802(3%)

32287(4%)

9860(1%)

51226(6%)

sector

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 ive policies from the Govt. Aimed at promotion of small and mini hydro projects for remote areas Strengthening 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 projects Projects were awarded through competitive bidding This policy was revised in 1998 and after that it offer some fiscal incentives as well Due 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 ed 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 .

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 fuel 2.Delays in Clearances 3.Regional concentration of power Generation 4.Low operational Efficiency 5.Lack of Private Investment 6.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 : Nisha Aggarwal

Submittedby Dr. Dr. Divya joshi

Introduction • 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

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 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, underes, byes, bridges - inadequate availability of alternative modes

etc.

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 enger carrier Network spans more than 64,600 kms. 3rd largest in world enger traffic witnessed a CAGR of 5.2% during 2008-13 • Freight traffic ed a marginally lower CAGR of 4.9% in same period. • Sector runs 12617 trains, carrying over 23 Million engers daily connecting 7172 stations • 7421 freight trains are run carrying about 3 million tonnes of freight every day

MERITS OF RAILWAYS BETTER ORGANISED

DEPENDABLE

CHEAPER MODE OF TRANSPORT IMPETUS TO AGRICULTURE DEVELOPMENT

GROWTH OF MARKETS & SPECIALISATI ON

FLEXIBLE IN OF CARRYING CAPACITY

CHECK ON THE FLUCTUATIONS OF PRICES MOST HELPFUL IN CALAMITIES

EMPLOYMENT

ENCOURAGEMENT TO TOURISM

STRATEGIC IMPORTANCE

SAFETY

STRONG ENVIRONMENTAL FOCUS

PUBLIC WELFARE

DEMERITS OF RAILWAYS INFLEXIBLE ROUTES

HUGE CAPITAL OUTLAY LACK OF DOOR TO DOOR SERVICE

MONOPOLY

UNSUITABLE FOR SHORT DISTANCE & SMALL LOADS

BOOKING FORMALITIES

UNDERUTILISED CAPACITY

NO RURAL SERVICES

UNSAFE FOR FRAGILE ITEMS

ISSUES AND CHALLENGES INADEQUATE INFRASTRUCTURE UNDER INVESTMENT POOR SERVICE QUALITY UNMANNED LEVEL CROSSINGS CLEANLINESS AND CATERING LAW & ORDER PROBLEMS STIFF COMPETITION

LOW PRIVATE SECTOR PARTICIPATION LOW OPERATING EFFICIENCY SOCIAL BURDEN LAND ACQUISITION &CLEARANCES ISSUES NON- AVAILABILITY OF SEPARATE ENGER &FREIGHT LINES UNAUTHORISED VENDERS HIGH TARIFF RATES LIMITED NON-CORE BUSINESS

Allocation in union budget 201415 Urban metro projects- Rs.100 crore for Lucknow &Ahmadabad Light rail systems in PPP mode- funding by VGF(VIABILITY GAP FUNDING) Diamond quadrilateral project of high speed trains High speed bullet trains- Mumbai- Ahemdabad route Freight corridors proposed on eastern and western corridors.

Rail- road competition and coordination 1. Causes of competition: Flexibility of time table to suit individual requirements Provision for door to door services No booking hassels Lower operational costs Freedom of movement due to availability of multiple routes Suitability for short distance Unlike railways no social welfare obligations etc..

2. Need for co-ordination:

To relieve severe traffic To control increasing pollution To check accidents Limits & constraints to expansion of existing road network Ensure better returns on huge fixed investment Check on wastage All-round development

Measures adopted for co-ordination: 1.MITCHEL KIRKNESS COMMITTEE 2.RAIL-ROAD CONFERENCE-1933 3.TRANSPORT ADVISORY COUNCIL-1935 4.MOTOR VEHICLE ACT,1939 5.COMMITTEE ON TRANSPORT POLICY AND COORDINATION-1959 6.NATIONAL TRANSPORT POLICY COMMITTEE-1980 7.THE STEERING COMMITTEE ON PERSPECTIVE PLANNING FOR TRANSPORT DEVELOPMENT-1988 8.TRANSPORT POLICY DEVELOPMENT COMMITTEE2010

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 ed 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

TYPES OF SERVICES

SCHEDULED AIR TRANSPORT SERVICE

NON-SCHEDULED AIR TRANSPORT SERVICE

AIR CARGO SERVICE

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.

TYPES OF WATER TRANSPORT

INLAND WATER TRANSPORT

OCEAN TRANSPORT

OCEAN TRANSPORT

COASTAL SHIPPING

OVERSEAS SHIPPING

MERITS OF WATER TRANSPORT • • • • • • •

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

• Fuel Efficient • Environment Friendly Useful 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