Infrastructure Development in India

Post-liberalisation Initiatives and Challenges

Contents

Preface ix-xii

Part I: Infrastructure Development: An Introduction

1. Infrastructure Development: An Introduction 1-281.1 Infrastructure and Economic Development

1.1.1 Infrastructural Bottlenecks1.2 Traditional Approach to Infrastructure1.3 Commercialisation of Infrastructure Services: The New Approach1.4 Allocation of Risks: The Key Problem

1.4.1 Build-Operate-Transfer (BOT)1.4.2 Public-Private Partnership1.4.3 Value Guarantees

1.5 Infrastructure Finance: Nature and Options1.5.1 Role of Financial Institutions1.5.2 Debt Market1.5.3 External Sources

1.6 India Infrastructure Finance Company Limited (IIFCL)1.7 Recent Policy Announcements on Infrastructure

1.7.1 Infrastructure in Recent Union BudgetsA. Budget 2004-05B. Budget 2005-06C. Budget 2006-07D. Budget 2007-08

1.7.2 Approach Paper to Eleventh Five Year Plan (2007-12) onInfrastructure

1.8 FDI in Infrastructure1.9 Conclusion

Part II: Economic Infrastructure

2. Energy Sector: Objectives and Policy Measures 29-602.1 Electric Power

2.1.1 Basic Facts2.1.2 Legal and Regulatory Framework

A. Electricity Act, 2003

xiv Infrastructure Development in India

B. Amendment to the Electricity Act, 2003C. Electricity Rules, 2005

2.1.3 Institutional Reforms2.1.4 Private Sector Participation in Power Sector

A. Privatisation of Delhi Vidyut Board2.1.5 FDI in the Power Sector2.1.6 Poor Performance of State Electricity Boards (SEBs)2.1.7 Scope for Commercialisation of Power Sector2.1.8 Accelerated Power Development Programme (APDP)2.1.9 Hydro Power Development2.1.10 Nuclear Power2.1.11 Captive Power Generation2.1.12 Tax Incentives to Power Sector2.1.13 Trading in Electricity2.1.14 Rural Electrification

A. Scheme for Rural Electricity Infrastructure andHousehold Electrification

B. Rajiv Gandhi Grameen Vidyutikaran Ydjana (RGGVY),April 2005

C. Progress of Implementation of RGGVY(till February 9, 2007)

2.1.15 New Tariff Policy of Central Electricity RegulatoryCommission (CERC) for 2004-09

2.1.16 National Electricity Policy: Main Features2.1.17 Partnership in Excellence2.1.18 Eleventh Five Year Plan (2007-12) on Electric Power2.1.19 Recent Initiatives in the Power Sector

A. Ultra-Mega Power Projects (UMPPs)B. Development of Merchant Power PlantsC. Power Transmission Network and National Grid

2.1.20 Conclusion2.2 Coal

2.2.1 Eleventh Five Year Plan (2007-12) on Coal2.2.2 Conclusion

2.3 Oil and Gas2.3.1 Recent Initiatives in Oil and Gas2.3.2 Eleventh Five Year Plan (2007-12) on Oil and Gas2.3.3 Conclusion

Contents xv

3. Transport Sector: Recent Initiatives and Outlook 61-923.1 Indian Railways

3.1.1 Introduction of Railways3.1.2 Importance of Railways3.1.3 Recent Initiatives for Development of Railways

A. National Rail Vikas YojanaB. Railway Safety Review CommitteeC. Participation of State GovernmentsD. Technological UpgradationE. Other Initiatives

3.1.4 Eleventh Five-Year Plan (2007-12) on Railways3.1.5 Conclusion

3.2 Roads and Road Transport3.2.1 Introduction3.2.2 Deficiencies of Road Network3.2.3 Recent Initiatives and Future Plans in Road Network

DevelopmentA. National Highways Development ProjectB. Pradhan Mantri Gram Sadak Yojana (PMGSY)C. Public-Private Partnership (PPP)D. Special Accelerated Road Development Programme

in the North Eastern Region (SARDP-NE)3.2.4 Current Issues in Road Network Development

A. Development StrategyB. Maintenance and Management of HighwaysC. Highway Improvements on User Pay BasisD. Quality and Adequacy of Main RoadsE. Corridor ManagementF. Institutional Arrangements

3.2.5 Eleventh Five Year Plan (2007-12) on Roads Network3.2.6 Conclusion

3.3 Ports3.3.1 Utility of Ports3.3.2 Capacity and Capacity Utilisation of Ports3.3.3 Problems Faced by Indian Ports

A. Specific Problems Faced by Oil and Gas SectorB. Other Bulk Traffic

3.3.4 Containerisation3.3.5 Recent Policy Initiatives and Outlook

xvi Infrastructure Development in India

A. Private Sector ParticipationB. Joint VenturesC. Manpower PlanningD. Development of Hinterland/Port ConnectivityE. Information Technology in PortsF. Environmental Clearance/Security/Safety Issues

3.3.6 Eleventh Five Year Plan (2007-12) on Ports3.3.7 Conclusion

3.4 Civil Aviation3.4.1 From Monopoly to Competition3.4.2 Recommendations of Naresh Chandra Committee3.4.3 Modernisation of Delhi and Mumbai Airports3.4.4 Greenfield Airports3.4.5 Non-metro Airports3.4.6 Eleventh Five Year Plan (2007-12) on Civil Aviation3.4.7 Conclusion

4. Telecommunications: The Great Leap 93-1104.1 Importance of Telecommunications4.2 Telecommunications in India4.3 New Telecom Policy (NTP), 19994.4 Bharat SancharNigam Limited (BSNL) and Mahanagar

Telephone Nigam Limited (MTNL)4.5 Telecommunications Regulatory Authority of India (TRAI)4.6 FDI in Telecommunications4.7 Telecommunication Services in Rural Areas4.8 Recent Policy Initiatives in Telecom Sector4.9 Agenda for Reforms4.10 Eleventh Five Year Plan (2007-12) on Telecom and

Connectivity4.11 Vision for the Future4.12 Modernisation of Postal Services4.13 Conclusion

5. Special Economic Zones (SEZs): Islands of IntegratedProduction Facilities 111-1265.1 Economics of SEZs

5.1.1 Meaning of SEZs5.1.2 Types of SEZs

Contents xvii

5.1.3 Configuration of a SEZ ,5.1.4 Advantages of SEZs ;

5.1.5 Pre-conditions for the Success of SEZs5.1.6 Possible Reasons for the Failure of a SEZ . .5.1.7 Role of the Government5.1.8 Role of the Private Sector "5.1.9 SEZs and SmalLEnterprises5.1.10 Global Experience

A. ChinaB. North KoreaC. Philippines

5.2 SEZs in India5.2.1 Experience with Export Processing Zones (EPZs) =

5.3 Main Features of the SEZ Policy in India5.4 Criteria for Approval5.5 Conversion of EPZs into SEZs , , . . •• . />

5.5.1 How are SEZs Different from EPZs? . " " .5.5.2 Will EPZ Conversion Help? . ., ., , , , \ .

5.6 Performance of SEZs in India5.7 Apprehensions and Concerns5.8 SEZs and National Security5.9 Lessons from China : . •:• <

5.9.1 Size of SEZ . • = . • • .5.9.2 Customs Regulations5.9.3 Incentives Package5.9.4 Labour Laws5.9.5 Involvement of State and Local Authorities5.9.6 DTA Sales5.9.7 Foreign Investment and Technology

5.10 Challenges/Task Ahead5.11 Conclusion

6. Urban and Rural Infrastructure , 127-1446.1 Urban Infrastructure .

6.6.6.6.6.

.1 Degree of Urbanisation in India

.2 Constitution (Seventy-fourth Amendment) Act, ] 992

.3 Features of Urban Infrastructure Services

.4 Urban Transport

.5 Safe Drinking Water

xviii Infrastructure Development in India

6.1.6 Solid Waste Management (SWM)6.6.6.6.6.6.

.7 Sanitation

.8 Urban Housing

.9 Financing of Urban Infrastructure

. 10 Cost Effectiveness

.11 Institutional Structure

. 12 Jawaharlal Nehru National Urban Renewal Mission6.1.13 Eleventh Five Year Plan (2007-12) on Urban

Infrastructure6.1.14 Conclusion

6.2 Rural Infrastructure6.2.1 Constitutional Provisions6.2.2 Pradhan Mantri Gram Sadak Yojana (PMGSY)6.2.3 Rural Electrification6.2.4 Indira Awaas Yojana (IAY)6.2.5 Rural Water Supply6.2.6 Rural Sanitation6.2.7 Rural Infrastructure Development Fund (RIDF)6.2.8 Bharat Nirman Programme for Rural Infrastructure6.2.9 Conclusion

7. Tax Incentives for Infrastructure Development 145-1547.1 Economics of Tax Incentives

7.1.1 Forms of Tax IncentivesA. DeductionsB. Tax Credit

7.1.2 Rationale for Tax IncentivesA. IndividualsB. Business OrganisationsC. General Purpose Incentives

7.1.3 Problems Created by Tax Incentives7.1.4 Alternatives to Tax Incentives

7.2 Justification for Tax Incentives for Infrastructure Development7.3 Tax Incentives under Income Tax Act, 1961

Part III: Social Infrastructure

8. Human Development and Social Security 155-1788.1 Human Development Indicators

Contents xix

8.2 Millennium Development Goals: Deadline 20158.3 Social Security: Conceptual Framework

8.3.1 Meaning of Social Security8.3.2 Approaches to Social Security

8.4 Social Security in India's Constitution8.4.1 Directive Principles of State Policy8.4.2 Social Security: A Fundamental Right

8.5 Present Status of Social Security in India8.5.1 Ranking of Social Security Needs8.5.2 Social Security Legislations in India •

8.6 Major Programmes for Social DevelopmentLaunched in 2005-06

8.7 Disaster Management8.8 Roadmap for the Future •

9. Poverty and Poverty Alleviation Programmes , 179-1949.1 How is Poverty Line Drawn?9.2 Incidence of Poverty

9.2.1 Estimates of Dandekar and Rath9.2.2 Estimates of Planning Commission

9.3 Causes of Poverty .9.4 Major Poverty Alleviation and Employment Generation

Programmes9.4.1 Jawahar Rozgar Yojna9.4.2 Pradhan Mantri Gramodaya Yojana (PMGY)9.4.3 Swarnajayanti Gram Swarozgar Yojana (SGSY)9.4.4 Sampoorna Grameen Rozgar Yojana (SGRY)9.4.5 Rural Housing Schemes9.4.6 Pradhan Mantri Gram Sadak Yojana (PMGSY)9.4.7 Drought Prone Areas Programme (DPAP), Desert

Development Programme (DDP) and IntegratedWastelands Development Programme (IWDP)

9.4.8 Antyodaya Anna Yojana (AAY)9.4.9 Swarna Jayanti Shahari Rozgar Yojana (SJSRY)9.4.10 Valmiki Ambedkar Awas Yojana (VAMBAY)

9.5 Union Budget 2005-06: Assault on Poverty and Unemployment9.6 Conclusion

10. Health and Family Welfare 195-21010.1 Health

xx Infrastructure Development in India

10.1.1 Incidence of Major Diseases10.1.2 National Rural Health Mission (NRHM)10.1.3 Eleventh Five Year Plan (2007-12) on Health

10.2 Family Welfare10.2.1 Family Welfare in the National Population

Policy (2000)10.2.2 Family Welfare in the Tenth Five Year Plan

10.3 Nutrition Support10.3.1 National Nutrition Mission

10.4 Conclusion

11. Education and Training 211-21911.1 Education as Critical Input11.2 Elementary Education: Select Programmes

11.2.1 District Primary Education Programme11.2.2 National Programme of Nutritional Support to

Primary Education11.2.3 Pradhan Mantri Gramodaya Yojana11.2.4 Sarva Shiksha Abhiyan (SSA)11.2.5 National Programme for Education of Girls at

Elementary Level (NPEGEL)11.2.6 Education Guarantee Scheme and Alternative and

Innovative Education (EGS&AIE)11.2.7 Mid-Day Meal Scheme11.2.8 Kasturba Gandhi Balika Vidyalaya (KGBV)11.2.9 Prarambhik Shiksha Kosh (PSK)

11.3 Secondary and Higher Education11.4 Technical Education11.5 Adult Education11.6 Education and Health in the Eleventh Five Year

Plan (2007-12)

12. Labour Force and Employment Policy 220-24312.1 Work Force Participation Rates12.2 Occupational Structure12.3 Nature and Extent of Unemployment in India

12.3.1 Urban Unemployment12.3.2 Rural Unemployment12.3.3 Estimates of Unemployment

Contents xxi

12.4 Causes of Unemployment12.4.1 Labour Force Pressure12.4.2 Slow Growth of the Economy12.4.3 Capital-intensive Technology12.4.4 Defective Education System

12.5 Government Policy to Tackle Unemployment12.6 Second National Commission on Labour, 200212.7 Results of 55th Round of NSSO Survey on Employment and

Unemployment, 1999-200012.8 Results of 60th Round of NSSO Survey on Employment and

Unemployment, January-June 200412.9 Special Group on Targeting Ten Million Employment

Opportunities Per Year during the Tenth Plan12.9.1 Employment in the Organised Sector12.9.2 Labour Laws12.9.3 Cluster Development

12.10 Swarna Jayanti Shahari Rozgar Yojana (SJSRY)12.11 Swarnjayanti Gram Swarozgar Yojana (SGSY)12.12 Sampooma Grameen Rozgar Yojana (SGRY)12.13 National Food for Work Programme (NFFWP)12.14 Employment Policy in Tenth Five Year Plan (2002-2007)12.15 Sectoral Policies for Employment Generation

12.15.1 Agriculture12.15.2 Agro-processing Industries12.15.3 Small-scale Industries12.15.4 Construction12.15.5 Travel and Tourism12.15.6 Employment Generation in Social Sectors

12.16 National Rural Employment Guarantee Act, 2005:Main Provisions

12.17 Eleventh Five Year Plan (2007-12) on Employment12.18 Future Employment Scenario

13. Labour Welfare: Legal Framework and Initiatives 244-26513.1 Need for Social Security13.2 Constitution and the Directive Principles of State Policy13.3 Legislations Pertaining to Labour13.4 Labour Related Organisations/Activities/Schemes13.5 Employees State Insurance (ESI) Scheme

xxii Infrastructure Development in India

13.6 Employees Provident Fund (EPF)13.7 Payment of Gratuity13.8 Employees Pension Scheme .13.9 Retrenchment Compensation

13.9.1 National Renewal Fund13.10 Unemployment Allowance13.11 Labour Welfare Funds13.12 Insurance Scheme for Cultivators13.13 Insurance Scheme for Agricultural Workers13.14 Tax Concessions for Labour Welfare

13.14.1 Income Tax Concessions13.14.2 Wealth Tax Concessions13.14.3 Excise Duty Concessions

13.15 Conclusion

14. Women Workers: Legislations and Empowerment 266-28714.1 Provisions Regarding Working Conditions for Women14.2 Women Welfare: Constitutional Rights14.3 Categorisation of Laws Pertaining to Women14.4 Equal Remuneration Act, 197614.5 Maternity Benefit Act, 1961

14.5.1 Working of the Act .14.5.2 Marriage: A Bar to Employment

14.6 Factories Act, 194814.6.1 Background14.6.2 Night Work14.6.3 Maximum Permissible Weight of Load14.6.4 Creche Facilities14.6.5 Unhealthy Employment14.6.6 Welfare Facilities

14.7 Mines Act, 1952 . . . . . .14.7.1 Enforcement Aspects

14.8 Plantation Labour Act, 195114.9 Beedi and Cigar WorkerS:(Conditions of Employment)

Act, 196614.10 Employees State Insurance Act, 194814.11 Enforceability of the Acts14.12 Recommendations of National Commission on

Self-employed Women Regarding Enforcement of

Contents xxiii

Labour Laws14.13 Empowerment of Women

14.13.1 Ninth and Tenth Plans on Women Empowerment14.13.2 Task Force on Women and Children14.13.3 Women Welfare Programmes14.13.4 Rashtriya Mahila Kosh (RMK)14.13.5 Family Counselling Centres14.13.6 Short Stay Homes14.13.7 Swa-shakti Project14.13.8 Protection from Domestic Violence Act, 2006

15. Empowerment of Socially Disadvantaged Groups 288-30015.1 Scheduled Castes15.2 Scheduled Tribes15.3 Other Backward Classes (OBC)15.4 Minorities15.5 Physically/Mentally Challenged

15.5.1 Leprosy Patients15.5.2 Mentally Retarded

15.6 Social Deviants15.7 Older Persons15.8 Other Disadvantaged Groups

15.8.1 Beggars15.8.2 Scavengers15.8.3 Street Children

15.9 Right to Maintenance15.10 Conclusion

Part IV: Economic and Social Infrastructure in India'sFive Year Plans: Edited Extracts

First Five Year Plan: 1951-56 301-333Energy

Electric PowerCoal

TransportRailwaysRoads and Road Transport

xxiv Infrastructure Development in India

ShippingCivil Aviation:

CommunicationsDevelopment Plans

Urban Development and HousingHousing PolicyRural Housing

Health and Family WelfarePrioritiesFamily Planning

Education and TrainingPre-School EducationPrimary EducationBasic EducationSecondary EducationUniversity Education

Second Five Year Plan: 1956-61 f 334-358Energy

Electric PowerCoal

TransportRailwaysRoads and Road TransportShippingCivil Aviation

CommunicationsPosts and TelegraphsLocal Telephone ServiceTrunk Telephone ServiceTelegraph ServiceExpansion of Postal FacilitiesOther ProgrammesIndian Telephone IndustriesOverseas Communications Service

Urban Development and HousingRural Housing

Health and Family WelfareHospital Services

Contents xxv

Family PlanningEducation and Training

Elementary EducationSecondary EducationUniversity Education

Third Five Year Plan: 1961-66 359-383Energy

Electric Power• Coal

OilTransport

RailwaysRoadsInland Water TransportShippingPorts and HarboursCivil Aviation

CommunicationsPosts and TelegraphsTelephone Services*Telegraph ServicesPostal ServicesOther Schemes

Housing and Urban and Rural PlanningHousing BoardsSlum Clearance and Improvement

Health and Family WelfarePrimary Health Units, Hospitals and DispensariesFamily Planning

Education and TrainingPre-School EducationElementary EducationSecondary EducationUniversity EducationTechnical Education

Fourth Five Year Plan: 1969-74 384-404Energy

xxvi Infrastructure Development in India

Electric PowerCoalOil

TransportTrends in Rail and Road TrafficRailwaysRoadsRoad TransportPortsShippingInland Water TransportFarakka BarrageCivil Air TransportTourism

CommunicationsBroadcasting

Urban Development and HousingVillage HousingWater Supply and Sanitation

Health and Family WelfareFamily Planning

Education and TrainingApproachPre-school EducationElementary EducationSecondary EducationHigher Education

Fifth Five Year Plan: 1974-79 405-415Energy

Electric PowerCoal

TransportRailwaysRoadsRoad TransportMajor PortsMinor PortsShipping

Contents xxvii

Inland Water TransportLight HousesAir-IndiaIndian AirlinesInternational Airports Authority of IndiaCivil Aviation DepartmentTourism

CommunicationsPostal ServicesTelecommunicationsOverseas Communication ServicesTelevision

Urban Development, Housing and Water SupplyUrban DevelopmentHousingRural Water Supply and SanitationUrban Water Supply and Sanitation

Health and Family WelfareCentral SectorState SectorFamily Welfare Planning Programmes

Education and TrainingElementary EducationSecondary EducationUniversity EducationNon-Formal EducationOther ProgrammesTechnical EducationCultural Programmes20-Point-Socio-Economic Programmes

Sixth Five Year Plan: 1980-85 416-450Energy

Electric PowerCoal

TransportRailwaysRoadsRoad Transport

xxviii Infrastructure Development in India

Inland Water TransportMajor PortsCivil Aviation

CommunicationsPostal SystemTelecommunications

Housing, Urban Development and Water SupplyRural HousingUrban Housing

Health and Family WelfareFamily Planning

Education and TrainingEarly Childhood EducationElementary EducationAdult EducationSecondary Education^Higher EducationTechnical Education

Seventh Five Year Plan: 1985-90 (Volume I) 451-455Energy

Electric PowerCoalCrude Oil

TransportCommunicationsHousing and Urban DevelopmentHealth and Family Welfare

Water Supply and SanitationEducation and Training

Seventh Five Year Plan: 1985-90 (Volume II) 456-477Energy

Electric PowerTransport

RailwaysRoadsUpgradation and RehabilitationMissing Links and Structures

Contents xxix

Modernisation of TechnologyPreservation of EnvironmentMaintenance of AssetsInstitutional ImprovementsAugmentation of ResourcesNational HighwaysState Highways and Major District RoadsRural RoadsRoad TransportShippingCivil Aviation

CommunicationsUrban Development and Housing

Rural HousingHealth and Family Welfare

Family WelfareEducation and Training

Eighth Five Year Plan: 1992-97 (Volume I) 478-484Energy

Electric PowerCoalCrude Oil

TransportCommunicationsUrban Development and HousingHealth and Family WelfareLiteracy and Education

Eighth Five Year Plan: 1992-97 (Volume II) 485-512Energy

Electric PowerTransport

RailwaysRoadsRoad TransportShippingCivil Aviation

Communications

xxx Infrastructure Development in India

PostsTelecommunications

Urban Development and HousingHealth and Family Welfare

Family Welfare ProgrammeEducation and Training

Strategies

Ninth Five Year Plan: 1997-2002 (Volume I) 513-523Energy

Electric PowerCoalPetroleum Sector

TransportRailwaysRoadsPorts

CommunicationsTelecommunication

Ninth Five Year Plan: 1997-2002 (Volume II) 524-547Energy

Electric PowerTransport

RailwaysRoadsPortsCivil Aviation

CommunicationsTelecommunicationsNew Policy for Internet Service Providers (ISPs)Policy Framework

Urban Development and HousingMajor Sectoral Objectives of the Ninth Plan

Health and Family WelfareFamily Welfare

Education and TrainingAdult EducationSecondary Education

Contents xxxi

University and Higher Education

Tenth Five Year Plan: 2002-07 (Volume I) 548-551Energy

Electric PowerTransportCommunications

Tenth Five Year Plan: 2002-07 (Volume II) 552-574Energy

Electric PowerTransport

RailwaysRoadsRoad TransportPortsCorporatisation of Major PortsPrivate Sector ParticipationJoint VenturesDevelopment of Gateway PortsTariff Policy and Regulatory AuthorityManpower PlanningDevelopment of Hinterland/Port ConnectivityInformation Technology in PortsCivil Aviation

CommunicationsPostsTelecommunications

Urban Development and HousingMajor Issues in Urbanisation for the Tenth PlanUrban GovernanceHousing

Health and Family WelfareEducation and Training

Tenth Five Year Plan: 2002-07 (Volume III) 575-580EnergyTransport

Railways

xxxii Infrastructure Development in India

RoadsRoad Density

CommunicationsPostal SectorSpread of Post Offices in StatesPopulation under One Post Office

Health and Family WelfareInfant Mortality RateLife Expectancy at Birth

Education and TrainingLiteracy Levels in StatesGender Disparities in Literacy Rates

Eleventh Five Year Plan: 2007-12 581-586(Approach Paper Released in November 2006)Infrastructure Development

Public Private PartnershipsEnergy

Energy Initiatives during Eleventh PlanTransport

RailwaysRoads

Part V: Appendices

Appendix 1: Economic Reforms in India: An Overview 587*606

Appendix 2: Ten Point Agenda Declared by Minister of

Communications and Information Technology on 24.05.2006 607-608

Appendix 3: Cellular Mobile Telephone Service 609-610

Appendix 4: Very Small Aperture Terminal (VSAT) 611

Appendix 5: Universal Service Obligation Fund (USOF) 612-614

Select Bibliography 615-620

Index 621-634