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In India, Infrastructure Falls Short as Economy Moves Forward


India is building new roads, airports and power plants to cater to the needs of an economy that is growing at a rapid pace. But, as Anjana Pasricha reports from New Delhi, infrastructure continues to be woefully inadequate.

Later this month, a gleaming, new airport will open in India's famous information technology hub, Bangalore, meeting a long-standing demand of the I.T. industry.

However, access roads to the new airport -- 36 kilometers north of the city center -- have not been widened to ease chronic traffic snarls. As a result, people fear the commute to the airport could take up to three hours -- longer than a short-haul flight.

Inadequate transport networks in bursting cities is just one of the problems confronting a country where all infrastructure is in short supply -- whether it is reliable power, highways, ports or world-class airports.

Bidisha Ganguly, a consultant at the Confederation of Indian Industry, says these shortages have intensified amid the recent economic boom.

"India has been growing at a very fast rate," Ganguly said. "So, as a result, all infrastructure is strained, so there are huge gaps and bottlenecks everywhere. We don't build infrastructure ahead of demand. We typically build it once the bottlenecks are there and fairly apparent."

The bottlenecks are becoming severe. Vehicles choke already crowded roads as car sales go up. Average loading and unloading time at busy sea ports is 85 hours -- 10 times longer than at Singapore or Hong Kong. Airports and ports often run short of warehouse space. It takes manufacturers days to transport goods from one part of the country to the other -- partly because trucks are barred from congested cities during the day for fear they might bring traffic to a standstill.

Lack of adequate power is perhaps the most severe problem. Most industries and offices rely on massive power generators because electricity is often shut off for hours at a stretch, even in prime business and industrial areas.

The head of the Indian Council of International Economic Relations, Rajiv Kumar, says lack of adequate infrastructure holds back growth and discourages investors -- both domestic and foreign.

"The industry has to provide all the infrastructure needs, itself, rather than these be available to it as it is in all other countries routinely as a part of the delivery of public services," Kumar said. "That means that even for those who can afford to do this, the costs become very high. But for a large number of medium and small enterprises it just means that they simply have to forego investment opportunities. So, infrastructure deficit in my view is probably costing India up to two percent growth in GDP (gross domestic product)."

The government acknowledges the country is grappling with a huge infrastructure deficit. It estimates India needs to invest $500 billion, in the next five years, to build roads, seaports, airports, high-speed expressways and power plants. The government is calling on the private sector to share the task.

Some of that investment is already in the pipeline. A project to link the country's four major cities with wide roads is to be completed this year. Modern airports are being built in several cities, under a new model under which private groups will build facilities, collect tolls and eventually hand the project back to the government.

The government says the results of all these investments will be visible in five to 10 years. But many fear it may be longer, because many infrastructure projects often get delayed.

Ganguly says India needs to speed up the pace at which projects are implemented.

"The feeling is that much more should be done," Ganguly said. "While the government has a broad plan, there are problems in implementation, getting clearances. Bureaucratic delays are there and it is not a straightforward issue, where you can just go and build a port or a airport."

But many acknowledge that it is not always easy to fast track projects in a democracy where issues like land acquisition are sensitive and time consuming.

Critics often compare India to the other Asian giant, China, which has built world-class infrastructure in record time. But others point out that although the Chinese central government's nod is enough to get a project off the ground, the task is far more difficult in India, where consensus is needed before any project can go ahead.