THE TRAGEDY OF INFRASTRUCTURE DEVELOPMENT IN INDIA

Infrastructure is critical for economic and social development the world over. At the most basic
human level, people need access to clean, safe water for drinking and cooking, and power for
lighting and heating their homes. Roads and railways allow people to get to work and provide
for their families. This transport infrastructure, as well as sea ports and airports, allows firms
to reach the markets they need to trade their goods and services, including across international
boundaries. In these ways, and many more, infrastructure is vital to quality of life and economic
development.

In the Union budget 2018-19, the Government of India has given a massive push to the
infrastructure sector by allocating Rs 5.97 lakh crore (US$92.22 billion) for the sector. The
infrastructure sector in India witnessed 33 deals in FY 2016-17 involving US$ 3.49 billion as
against US$ 2.98 billion raised across 31 deals in FY 2015-16, which majority of deals led by
the power, roads and renewable sectors.

According to the latest report of Ministry of Statistics and Programme Implementation, as

many as 344 infrastructure projects, each worth Rs 150 crore or more, have shown cost
overruns to the tune of over Rs 3.16 lakh crore owing to delays and other reasons. The
expenditure incurred on these projects was Rs 8,06,997.78 crore, which is 37.82 per cent of the
anticipated cost of the projects. Out of 384 delayed projects, 113 projects have overall delay in
the range of 1 to 12 months, 61 are delayed by 13 to 24 months, 101 reflect delay of 25 to 60
months and 109 projects show 61 months and above delay.

These delays are analysed in the ambit of scope and ground reality. Urban infrastructural
projects are delayed in execution for various reasons which are due to factors such as land
acquisition problems, lack of proper planning, litigation issues etc. These delays and cost
overruns have significant implications from an economic and political point of view. Due to
delay in implementation, people have to wait for provision of public goods and services longer
than is necessary. Infrastructure services acts as an input to many other sectors and the delay
causes further cost overruns. Most of the infrastructure projects in India uses taxpayers’ money.
Therefore, taxpayers have the right to know how efficiently their money is being utilised for
providing public goods and services.
For instance, the Bandra-Worli sea link completed in 2004 had a cost overrun of about 1,300
crore for five years delay. The quarterly reports of the Ministry of Statistics and Programme
Implementation stand testimony to a saga of unfettered delays and cost overruns. Litigation
was the major reason behind the delay of this project. Litigation affects the implementation of
the infrastructure projects in multiple ways. It adversely affects the working of administrative
processes an causes immense delay. A government office not only suffers in terms of
increasing cost of raw materials, labour etc. but also due to factors like loss of working hours
of their employees who are required to spend a substantial part of their time in court – related
works.

According to the Economic Survey Report 2017-18, delay due to litigation in several ministries
has caused a loss of Rs 52000 crores to the state exchequer. It has been further estimated that
a study of the 14 major ministries would indicate a loss of almost Rs. 1.5 lakh crores in ongoing
projects. There are a large number of projects which are facing several delays of several years,
of which delay due to litigation is the primary cause.

Even the Ease of Doing Business 2017-18 had estimated that the average time taken to receive
a court order for enforcement of a contract in India is 1445 days. These delays are causing
colossal loss to the overall growth of the economy. The Economic Survey Report had
categorically observed that “ A clear and certain legislative and executive regime backed by an
efficient judiciary and fairly and punctually protects the property rights, preserves sanctity of
contracts and enforces the rights and liabilities of parties, is a pre-requisite for business and
commerce.”

Enhanced policy intervention is the need of the hour. Measures are promptly called for to avoid
delays at each stage from project approval to awarding of contracts, and to its implementation.
To reduce the cost overruns due to delays can be solved by avoiding large and big cost projects.
Similarly project with long implementation schemes are vulnerable to future uncertainties.
Transparency in procedures reduces public tension thereby reduces the chances of litigation
and other legal uncertainties.