Contents

Executive summary 1
1.0 Indian economy – Status and outlook 3
Introduction 3
The Outlook – Scenarios for the immediate future (2009-10 and 2010-11) 13
Infrastructure status – A State-level analysis 18
2.0 Funding need, pattern & availability 23
Economic growth constrained by poor infrastructure 23
Power, roads and oil and gas to comprise a major share of investments over
the next 5 years 26
Risk vulnerability assessment across sectors 32
Materialisation of risks to have a 20 per cent downside impact 35
Corporates, including private and PSUs, to lead infrastructure investments 37
Corporates to focus on economically viable sectors; government to invest
in others 38
Funding not a major constraint; gap to ease going forward 40
Exposure cap constrains banks’ ability to lend 42
Financing through IIFCL likely to gather momentum 43
Fund availability from the insurance segment to improve in line with growth
in life insurance premiums 44
Infrastructure FDI - Inflows expected to grow at a CAGR of 13.5 per cent 45
Gap in funding to decline over the period 46
Fresh equity/debt raised in the domestic/international markets will be able
to easily bridge the gap 47
3.0 Power 49
Executive summary 49
Power sector - segment-wise break up 51
Demand-supply review 52
Demand-supply outlook 61
Regulatory framework 67
Key regulations and policies 69
Investment review 71
Investment outlook 73
Investment drivers and risks 75
Project economics 79
Funding sources 83

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4.0 Roads 85
Executive summary 85
Demand review 87
Supply review 88
Supply outlook 91
Regulatory framework 94
Key regulations and policies 96
Investment review 98
Investment outlook 99
Project economics 100
Investment risks 101
Funding sources 102
5.0 Oil and gas 103
Executive summary 103
Demand-supply review 104
Demand-supply outlook 109
Regulatory framework 112
Key regulations and policies 114
Investment review 116
Investment outlook 117
Risks to investment 118
Project economics 119
6.0 Railways 123
Executive summary 123
Demand review 124
Regulatory framework 127
Key regulations and policies 128
Investment review 129
Investment outlook 130
Initiatives to improve Indian Railways infrastructure 131
Investment drivers and risks 134
Funding sources 136
7.0 Irrigation 137
Executive summary 137
Demand-supply review 139
Demand-supply outlook 140
Regulatory framework 142
Investment review 144
Investment outlook 145
Investment drivers and risks 146
Funding sources 147

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8.0 Urban infrastructure 149
Executive summary 149
Burgeoning urban populace; stressed urban utilities 150
JnNURM - a significant step towards sustainable development 152
Investments increase due to urban reforms and Central aid 155
Sectoral and regional disparities in JnNURM 156
Water supply and sanitation 157
Solid waste management 159
Urban transport 161
PPP models in urban infrastructure 164
Investment opportunities to remain buoyant over the long term 166
Investment risks 167
Funding sources 168
9.0 Education 169
Executive summary 169
Sector review 171
Sector outlook 173
Regulatory framework 175
Key regulations and policies 177
Investment review 179
Investment outlook 180
Investment drivers and risks 181
Project economics 182
Funding sources 184
10.0 Telecom 185
Executive summary 185
Demand-supply review 186
Demand-supply outlook 190
Regulatory framework 192
Investments review 195
Investment drivers and risks 199
Project economics 200
Funding sources 201
11.0 Special economic zones 203
Executive summary 203
SEZs - introduction 204
SEZ - current status 206
Promoting investment by providing incentives to developer and unit 207
Contribution to exports on a steady uptrend 208
SEZ concentration seen in states that offer additional incentives 209
Key regulations and policies 211
Investments review and outlook 214
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12.0 Ports 215
Executive summary 215
Demand-supply review 217
Traffic: Outlook 218
Regulatory framework 219
Key regulations and policies 220
Investment review and outlook 221
Project economics 223
Investment drivers and risks 224
Funding sources 226
13.0 Healthcare 227
Executive summary 227
Demand-supply review 228
Regulatory framework 232
Investment outlook 233
Investment drivers and risks 235
Project economics 237
14.0 Airports 239
Executive summary 239
Passenger and cargo traffic: Review 240
Passenger & cargo traffic: Outlook 242
Regulatory framework 244
Key regulations and policies 246
Investment review 247
Investment outlook 248
Project economics 249
Investment drivers and risks 250
Funding sources 252
15.0 Warehousing 253
Executive summary 253
Warehousing sector review 254
Warehousing sector outlook 255
Cold storage sector review 256
Cold storage sector outlook 257
Key regulations and policies 258
Warehousing - Investment outlook 262
Cold storages - Investment outlook 264

iv CRISIL RESEARCH INDIAN INFRASTRUCTURE: NOVEMBER 2009