Five years ago, the UPA government headed by Manmohan Singh was lambasted for the loss of `1.2 lakh crore arising due to delays in 203 infrastructure projects. It was then dubbed policy paralysis. Now it is déja vu all over again as official data revealed the fact that cost overruns due to delay in executing infrastructure projects was as high as `1.29 lakh crore. The BJP, then in opposition, had gone hammer and tongs at the Congress-led coalition government. Now the shoe is on the other foot and the BJP-led NDA government will in all probability proffer similar excuses.
It is becoming increasingly evident that change in regimes would not result in dramatic results when the causes are largely systemic and structural. Two things should be troubling the government. One, delays are being reported in sectors such as railways and roads, urban development and power which are critical for triggering and stimulating the much-awaited economic growth. Two, the much-touted industry-friendly initiatives relating to simplifying processes, expediting decision-making at all levels, cutting red-tape, facilitation of capital and cash flows are yet to kick in or, worse, they have kicked but failed. On both counts, the government cannot afford to allow the impression to gain currency in domestic politics or financial markets.
Umpteen policy specialists and reports have discussed the issue threadbare and made recommendations for government, private sector and PPP projects. These range from tweaking the project financing models in general and the Public-Private Partnership model in certain specific cases to improve project implementation capabilities and strengthen contractual frameworks to sort out acquisition and clearance roadblocks. Government and governance-related problems apart, one of the biggest hurdles has been the capacity of the private sector. Piggy-riding on the backs of financial institutions and government won’t take them very far.