March 1, 2010

Think, plan and then build

Any discussion on infrastructure policy is based on the premise that if only adequate financing of projects can be ensured, the nation will be propelled on a certain path to growth. While the government is sincere about accelerating the pace of infrastructure projects, what has been lost sight of is the view of infrastructure as a strategic asset.

This lack of strategic perspective is evident in disjointed and uncoordinated development of the gamut of infrastructure projects. The Pradhan Mantri Gram Sadak Yojna, a well-intentioned scheme to construct rural roads nationwide under the rural development ministry, has created a fresh network of roads in the border areas of Rajasthan and Punjab. However the strategic implications of these new communication axes have not been factored in while executing these high-priority projects, thereby unhinging the longstanding operational plans of the armed forces. Such gaps in the conceptualisation and planning stages cannot be made up for by excellence in execution of projects.

The strategic potential of hard or economic infrastructure can only be harnessed if, to begin with, policy-making and planning emphasises the importance of synergistic development of various elements comprising it. The comment by Kamal Nath, the minister in charge of highways, that “we are not even close to wanting the transport modes to be complementary because the connectivity deficit is so large,” gives a glimpse of the non-strategic mindset at the highest level.

A strategic policy will involve viewing the entire range of infrastructure facilities and services with a ‘systems approach’—as a network—as opposed to only a sector specific approach with heterogeneous appendages joined piecemeal. This lack of a systems approach is most notable in urban and semi-urban infrastructure, where land use patterns are already established and retrofitting to relieve congestion is the norm. The seamless integration of services will entail co-ordination with multiple agencies from design to execution; dovetailing sectoral plans, agendas and settings; and discussions with stakeholders within an overarching national infrastructure policy framework. Policy positions in individual sectors will then flow from this framework to reap benefits in the provision and services of the entire network but distinct from a one-size-fits-all approach. Such individual policy positions will be flexible enough to respond to an issue in a specific sector, like those related to specialised technology, say in telecom, as against issues where responses are generic and applicable across sectors, like those of regulatory nature.

The new policy must outline a concrete roadmap to plan and build infrastructure for addressing crucial issues in economic, social and military spheres: regional disparities, inclusive growth, environmental degradation, land acquisition and augmentation of military capabilities among others.

High rate of economic growth, although necessary, has raised important questions about its nature—the growing disparities between regions as well as the widening gap in wealth and incomes. To narrow the development gap, the infrastructure deficit in backward regions must be reduced. While this can defuse political movements from taking to arms, building infrastructure is a challenge in insurgency affected areas, as it can only be built after augmenting of administrative capacity, which in turn is contingent on restoration of law and order. [See “Winning the counter-insurgency endgame“]

Unfortunately, regional growth does not necessarily translate into inclusive growth. It is a challenge to ensure affordability and accessibility of basic infrastructure facilities by the poor. Usage charges in such cases might have to be subsidised carefully, without allowing the middle-class to corner them, as happens with agricultural, LPG, and electricity subsidies. Another challenge is posed by sparsely populated rural areas where the high fixed costs of infrastructure investment over a small population reduce the revenue and do not attract private participation.

Land acquisition for infrastructure projects by eminent domain leading to displacement of population and loss of livelihood causes a great strain on the social fabric. Given the India’s miserable record of resettling affected populations and providing them alternative livelihood, large-scale land acquisition should be minimised. Where land acquisition is an absolute necessity, prompt and realistic market-based compensation must be paid so as to regain people’s faith in the state’s intent and capacity.

India’s emphasis on economic growth has understandably overridden environmental concerns. The infrastructure sector will be affected by the geo-politics of climate change and while skilful negotiations can ensure gradual switching over to green technologies without a sharp trade-off against growth, we can no longer continue to accord secondary importance to environmental and climate change concerns. The ecocide in certain regions in China is ample proof that a model focused solely on economic growth to the exclusion of spillover in other domains is unsustainable.

Efficient, resilient and reliable infrastructure facilities and services have to be designed with dual usage options: to impart competitive advantage in trade logistics, and to also impart an edge in military logistics in times of need. This is applicable in the heartland as much as in the areas along the border, going by the changed nature of modern warfare—asymmetric and focused on urban targets. Availability and the ability to build and operate such an infrastructure lend credibility to external perceptions of national power. In the past, Pakistani attempts to occupy Siachen and snowy peaks in Kargil were greatly influenced by their perception of inadequate logistics infrastructure on the Indian side and of India’s inability to respond decisively and speedily. Despite lessons from the past, the availability of infrastructure in the areas contiguous to China and bordering other neighbouring countries—for both trade and military logistics usage—leaves much to be desired.

If we consider the high sunk costs and long gestation periods of infrastructure projects along with the associated fallouts—social, economic, environmental and cultural—the implications of having an agglomeration of sub-optimal infrastructure projects are enormous. Therefore, formulation of a new strategic national infrastructure policy for sustainable and inclusive economic growth and greater military capability is a exceedingly important. A strategic infrastructure policy white paper, signalling the government’s commitment and methodical approach will also encourage foreign and domestic investors to participate in infrastructure development. Merely striving for increased investment without charting a long-term and comprehensive strategy—as the government seems to be currently trying—is not quite the right sequence of moves.

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