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India's infrastructure has been expanding at a rapid pace to support the economic growth rate of over 9 per cent. The six core-infrastructure industries, registered a robust increase of 9.6 per cent during March 2008 owing to accelerated production in the steel and coal sectors.
During 2007-08, the growth in the six core sectors - crude oil, cement, electricity, coal, petroleum refinery products and finished steel – were registered at 5.6 per cent. In March 2008, finished steel registered 21.8 per cent growth compared to 16.6 per cent in March 2007. Significantly, electricity generation registered 3.6 per cent, coal production grew 9.3 per cent and cement production grew by 8.1 per cent during April-March 2007-08.
Growth Potential
According to the consultation paper circulated by the planning commission, a massive US$ 494 billion of investment is proposed for the eleventh plan period (2007-12), which would increase the share of infrastructure investment to 9 per cent of GDP from 5 per cent in 2006-07. This translates roughly into US$ 40 billion annual additional investment.
The projected sector-wise shares are: 30.4 per cent in electricity, 15.4 per cent in roads and bridges, 13.7 percent in telecommunications and 12.4 per cent in railways among others. Significantly, 30 per cent of the total investment is expected to come from the private sector (including public-private partnership). Indian officials have invited foreign entrepreneurs to invest in the sector which would require investments worth US$ 500 billion to sustain India's fast-growing economy.
For this, the government has already enacted many proactive measures like opening up a number of infrastructure sectors to private players, permitting FDI into various sectors, introducing model concession agreements, taking up new projects like the National Highway Development Project, National Maritime Development Programme among others. Some of the projects planned for the next five years include:
