Infrastructure development is a key theme in India’s economic policy, given its linkages with GDP growth and trade expansion. The thrust of infrastructure policies in the decade of nineties has been the gradual decontrol and privatization of core infrastructure services such as power, telecommunications, airports, roads, and ports, which were under government monopoly.
Major reforms have been undertaken in respect of power, telecom, roads and civil aviation, allowing private and foreign ownership and the entry of institutional finance on a commercially viable basis.
Infrastructure segments grew by 6.4% in 2004. Power generation grew by 5.2%, railway freight traffic by 8.0%, port cargo by 11.3%, and air passenger traffic by 23.6%, air cargo 24.4%, telephone connections by 28.5%
The Govt. has resolved impediments and created the legal mechanisms to pave way for private ownership of infrastructure assets, foreign direct investment, autonomous regulatory authority, fiscal incentives such as tax-holidays and exemptions for funds invested in infrastructure, and special purpose vehicles to lease out, manage and transfer ownership of assets under Build-Operate-Transfer (BOT) and other models. |
ICREON