BRINGING THE ECONOMY BACK TO HIGH GROWTH PATH
Prime Minister Dr. Manmohan Singh called a meeting
of Ministers and Senior officials of the
Infrastructure Ministries - Power,
Highways, Civil Aviation and Shipping & Ports on 6th
June, this year. The purpose was to devise suitable
measures to bring the economy back to high growth
path. Indian economy which had been growing at 9 per
cent per annum for the past eight years, grew only
at 6.5 per cent in 2011-12 and in the last quarter
of the financial year the growth rate was 5.3 per
cent. Such turn of events, made the Government take
suitable measures to reverse the down turn.
At the meeting it was decided to invest two
lakh crore rupees in the current financial year and
compared to past
year made substantially increased allocations
for several sectors of the economy.
The quantum jump in investment in these
sectors, with significant private sector
participation through public-private partnership
mode, is expected to provide a massive boost to
overall manufacturing activity in allied sectors.
economy needs $ 1 trillion of investment in
infrastructure in the next five years.
Explaining the rationale for increased
investment in the core sector, the Prime Minister
said that development of infrastructure would always
be an integral part of any strategy for fast
economic development. “In the short term,
development of infrastructure will boost investment
rates across the economy. In the long run, it will
remove the supply constraints that affect industry
and trade,” pointing out that the government alone
would not be able to meet the vast investment needs
and, therefore, “it is important that we involve the
private sector in our efforts, through Public
The meeting focused, in particular, on the
ambitious projects and investment targets pertaining
to ports, roads and airports. In the ports segment,
the target for this fiscal comprising 42 projects
valued at Rs. 14,500 crore is almost three times
what was achieved in the last fiscal. Of these, two
projects are for brand new major ports on the East
Coast, one in Andhra Pradesh and the other in West
Bengal — with a total investment of Rs. 20,500 crore.
A statement issued by the Government said, “The
total capacity which will be awarded this year will
be 360 million ton per annum”. In roads, the total
length to be awarded in 2012-13 will be 9,500 km,
marking an increase of 18.7 per cent over the last
year and an increase in investment by 73.6 per cent.
Of these, a total of 4,360 km of roads will be
awarded for maintenance under the OMT (Operate,
Maintain, Transfer) system for the first time. In
civil aviation sector, green field airports are
proposed to be built in Navi Mumbai, Goa and Kannur.
This apart, Delhi and Chennai will have airport
hubs. Power generation capacity is also proposed to
be hiked by 18,000 mega watt.
Dr. Singh described the targets as ambitious
He expressed hope that these are achievable
and said that the Government is aware of the
challenges involved in their implementation. Hinting
at the global economy he said “The
global economy is passing through difficult times
with the Eurozone being the cause of concern all
around. There is a flight to safety taking place
globally. Then there has been the persistent problem
of rising international prices of petroleum and
other commodities in the last few years.
Domestically, rising demand, along with supply side
bottlenecks have contributed to inflationary
pressures. All these factors combine to constitute a
formidable economic challenge”.
It may, however, be remembered that this is
not the first time the Government is
taking up a major initiative to build massive
infrastructure. One of the problems in implementing
is the delay in getting clearances and
sometimes, different ministries take opposing stands
on some projects. Keeping these in view the Prime
Minister said, the Government will work on
multi-fronts. When the Ministers present in the
meeting cited inter-ministerial differences, Dr.
Singh asserted “I would expect the ministries to
very expeditiously resolve any inter-ministerial
differences and turf battles that might arise as we
The assertiveness shown by the Prime Minister
in the Government’s drive to re-energize the economy
will revive investors confidence. The Prime Minister
said that, there will be a review of
progress in implementation every three
months. Hopefully all these factors hindering
progress will be identified and removed as the
projects progress and the Indian economy which the
Prime Minister said is capable of achieving double
digit growth, will return to high growth path soon .
*The author is a Freelance Writer.
Disclaimer: The views expressed by the author
in this article are his own and do not necessarily
reflect the views of PIB.