Thumbs down

The UPA government’s report card on infrastructure — going by the monthly index of infrastructure industries exactly a year after the UPA came to power — shows abysmal failure. In July, the monthly index of six core infrastructure industries rose by a mere 0.5 per cent, compared to the level in July 2004. The growth in the first four months of the year 2005-06 — from April to July — at 4.2 per cent, has been less than half of that witnessed last year at 8.9 percent. One of the biggest losers in July 2005 has been thermal power. Since the progress in roads, ports and railways lends itself to an annual, rather than a monthly review, the government releases monthly figures for infrastructure industries which act as a proxy measure of activity in the infrastructure sector. The infrastructure industries index includes crude petroleum production, petroleum refining, coal, electricity, cement and finished steel. The biggest weight among these is that of electricity. Electricity production fell by 1.3 per cent in July 2005, while it had risen by 13.6 per cent in July 2004. In the first four months of this year, electricity production grew more slowly at 5.2 per cent, compared to 7.9 per cent last year.

Infrastructure was high on the agenda of the UPA government. The PM had even said that India was ready to absorb $150 billion as FDI in infrastructure in sectors like the railways, civil aviation, power and telecom over the next ten years. Unfortunately this concern has not translated into results. Even the much talked about special public vehicle for infrastructure has not found its place in the Outcome Budget. We see little evidence of higher growth. What we see instead is a Parliament interested in issues like reservations, and employment generation, and so on — these are important precisely because of the lack of core economic growth.

Take the latest infrastructure project proposed by the UPA — the Bharat Nirman project. It envisages huge investments in rural roads, electricity and drinking water. How the UPA plans to go about achieving this, will be interesting to observe.