|| India Infrastructure Report
A review by Sanjay Trehan (12 January 2001)
Infusing Intellectual Capital into Infrastructure
This report is subtitled as Issues in
Regulation and Market Structure. It could well have been An Insightful
Look at the Sordid State of Indias Infrastructure. Chapter after
relentless chapter, it makes a sad reading of the opportunities lost and
have been. But to say that it just examines issues of the past alone would
be to tell only half the story.
The report lays down, clearly and succinctly, the agenda for the future
and makes a strong case for reforms bereft of populism and platitudes.
It suggests, without mincing words, that the vested interests
of bureaucrats and politicians, and not the usually identified workers
and subsidized groups, along with ill-conceived reforms have led to the
present moribund state of infrastructure in India. And in that streak
of boldness, which is maintained throughout its over 290 pages, lies its
intrinsic strength, its immutable power.
Its another thing that I loved the report for the sheer lyricism
and lucidity of the language used. The feel of the language demonstrated
by the editor, Sebastian Morris, IIM-A, is a joy in itself. After a very
long time, perhaps after Prof. Sumit Sarkars Modern India, has an
economist shown such felicity with the language and used it so beautifully
especially in a subject thats as arid as the barren landscape it
Prey, dont take my word for it, for I feel intensely and passionately
about infrastructural issues. Its not a lost cause entirely. First
things first. This report is the result of a truly unique collaborative
effort by the 3iNetwork (www.3inetwork.org), consisting of the Infrastructure
Development Finance Company (IDFC), the Indian Institute of Management,
Ahmedabad, and the Indian Institute of Technology, Kanpur.
No Pussyfooting, Here
Deftly edited by Morris, it articulates the key issues and policy changes
that are imperative to increased commercialization and private sector
participation in the infrastructure development.
What is remarkable about this report, however, is the honesty and integrity
with which it sets to achieve its objective. There is no attempt to placate
the government, no desire to be seen on the right side of the establishment,
no pussyfooting. Nasser Munjee of IDFC sets the tone in his preface. Says
he: We need to ask ourselves one simple question
is it sustainable,
and is this in the interest of the consumer? If the answer is no
we need to seek alternatives, even if that means eliminating existing
structures of governance. Governance is about citizens, for citizens,
and has no other purpose. Bravo! Thats why I feel there is
still hope for this much abused country. More power to men like Munjee
Infrastructure development has indeed come full circle over the last hundred
years or so and the inefficiencies of the so-called welfare state have
bred public utilities monsters that now exist with the sole objective
of self perpetuation. They feed on a distorted incentive structure and
are fired by rent-seeking behaviour. These are some of the punches that
the report pulls.
Nine Chapters: Core Issues
The report is neatly divided into nine chapters, each covering a matter
of consequence when it comes to infrastructural facets of the Indian economy.
The first two are written by Morris and spread over 32 pages. Overview
(Chapter1), and Issues in Infrastructure Development Today: The Interlinkages
(Chapter2) offer the most incisive and telling commentary that I have
come across on the state of Indian Infrastructure. For instance, Morris
pooh-poohs the conventional view on subsidies. He says: the problem
is not subsidies per se but their mode of administration
that low prices are in the interest of the poor needs to be recognized
as such and exposed. Low prices have created the problem of slow expansion
or stagnation of the service, and hence have kept a large number of the
poor as outsiders, that is those who are denied the service
since they do not even have access. Can you argue with that?
Chapter 3, Regulation of Tariffs and Interconnection: Case Studies
outlines three cases of tariff rulings by regulators, two in the telecom
sector and one in bulk power. Regulatory Dilemmas in Infrastructure
Financing in Chapter 4 makes the point that while credit enhancements
and tax support for funds flow into infrastructure would be okay, one
needs to be careful about dilution of financial regulation or standards.
Structural constraints in infrastructure development in India form the
theme of the Chapter 5. In an essay, Rakesh Basant studies the Indian
telecom sector and highlights the cross-linkages between sector-specific
regulators and the competition agencies.
The Right to Information
In a brilliant, short and sweet essay, The Right to Information
as a Tool of Empowerment, Abha Singhal Joshi makes a strong
case for throwing open to public scrutiny, processes within organizations
that deal with the provisioning of public goods and services, and governance.
In a truly democratic set-up, the government must be made accountable
to the people for acts of commission or omission. Chapter 6 makes an in-depth
study of The Electricity Sector and the Chapter 7 takes a
long and hard look at The Transport Sector, both a
rich reservoir of information and analysis for the sector professional.
Being a new economy professional, Chapter 8, Review of the Indian
Telecom Sector by Rekha Jain got my attention. She examines
the developments in the institutions, policy, regulation, and network
and industry since the process of reform began in the early 1990s. You
can see how the policy gradually evolved from monopoly to licensed oligopoly
and now competition, and whether it has succeeded in terms of basic services
or not. NTP 1994 and NTP 1999 are discussed with economy of words but
with tremendous sharpness. In a subsequent essay, Looking Beyond
NTP 99, Ashok Jhunjhunwala makes a well argued case for a paradigm
shift into local and small-scale telecom solutions, relevant for a poor
country like India.
While the Chapter 9 deals with The Spatial Context
of Indian infrastructure (urban local bodies,
road design issues, vehicular air pollution, water and wastewater sector,
issues and strategies required for rural drinking water supply, bus transport
in Delhi), the essay on Dealing with Drought by Saumyen
Guha is a must read for its clear focus. It suggest that to deal with
drought, the storage of water in small reservoirs and ponds with local
initiative and involvement of the
people is critical and makes a strong case for the assignment of water
rights to the local bodies.
The report is intended to be a standard work of reference regarding infrastructure
development in India. I have no doubt that it will emerge as one for the
cognoscenti. The trouble is whether babudom has the intellectual wherewithal
to understand it implications, leave alone nuances.
Its too well-done for their taste or calibre. Perhaps they will
do well to go through just the first two chapters. You cant ask
them for more, given the state of their intellectual capital. Id
be interested in what you have to say? Happy reading.
(The author is Vice President with Indias
first reverse auction portal for travel, Razorfinish.com and writes
a popular column in The Economic Times on infrastructure related issues
on the Internet. Talk to him at email@example.com if you feel
the same passion for the Infrastructure.)