Challenges of Infrastructure Industry in India
Posted By:Infra Bazaar Views : 1734
Infrastructure Industry in India has registered great progress in the recent years. Creation of infrastructure is vital for India's economic development as the opportunities for future growth are enormous in the country.
Future growth is anticipated and expected in several areas and there is a proposed investment of over INR 56,00,000 crores in the next five years. The private players are scheduled to play a major role in carrying out this massive program spread across the length and breadth of the country.
Road and power sectors are expected to attract a lion’s share of the proposed investments, and several other new opportunities will also appear in the future. There are PMs pet schemes like Delhi-Mumbai Industrial Corridor, Smart Cities and creation of Logistics Network. A massive Urban Infrastructure Development is round the corner giving a boost to rapid growth of urbanization, urban transport and water supply projects.
With such projects in mind and in order to turn the infrastructure dream into a reality, there are great challenges which need to be tackled efficiently.
Here is a list of some of the major challenges which need the immediate attention of all the players:
Planning oriented issues:
There is a significant shortfall in planned investments.
Several of the announced projects are yet to be completed.
Delay in Implementation and execution.
Not able to get Land-acquisition and environmental clearances.
Lack of co-ordination between various Government agencies
Improper and Inappropriate structuring of the projects, with no demarcation of risks between Government and private sector
Absence of a proper dispute resolution mechanism between private players and government agencies
Developing a technically sound and Well-Equipped Regulator
Financial oriented issues:
There are time and cost overruns.
Burden on developers, because of execution delay,
Cautious approach by Banks in lending to infrastructure sectors,
There must be an overhaul of the current way of doing business in this sphere and a better practical and problem solving approach.
Removing the difficulties in raising funds, as banks have restricted exposure to the sector and funds from abroad lack a suitable avenue to invest
Assessing the projects for Technical and Financial Viability
There is a great need for improved transparency.
Improved access to key natural resources like coal and iron
Reduction of regulatory uncertainty and delays
Creating a mechanism for single window clearance for approvals
Strict ensuring of enforcement of contracts in a time bound manner.
A need to relook at risk profiles of projects and a better share of private players.
Providing sufficient safeguards for private players from extraneous circumstances
Employing best-in-class and Efficient Project Management Techniques
Addressing issues related to giving training and skills to the manpower,
Developing a suitable Project Database to provide the requisite information input,
Controlling the Inflation as it is vital for a successful completion of project in the proper timeframe.
Avoiding unnecessary Litigation and proper assigning of roles to all players
If these are solved at an initial stage the success story will be unique and worthy of emulation by the other nations across the globe.