Issues and Challenges to Urban Infrastructure in India

It has been observed that the growth of urban infrastructure does not match with the growth of urban population. Some striking facts about the challenges of urban infrastructure are as follows:

  • Status of drinking water supply, public transportation, sewage and solid waste management is much lower than desired.
  • No city has fully covered 24×7 water supplies.
  • Only 74% of the house-holds are served by piped water.
  • Only 65 of 423 class I cities have a formal city bus service in 2012.
  • Only 30% cities have sewage treatment as against desired 100%.
  • 7% urban population has access to the piper sewer system.
  • 6% urban population still defecates in the open.
  • Only 72% of the solid waste is collected and only 30% is segregated. Scientific treatment and disposal is non-existent.
  • 24% urban population lives in slums.

Major Infrastructure Bottlenecks in India

There are various bottlenecks which act as impediments for growth of infrastructure. The major ones are summed up below:

Financing

Infrastructure projects are highly capital intensive and funding is considered as a major impediment in achieving the infrastructure goals. The infrastructure broadly can be divided into two types, one which is very essential for the public at large and have no or very little revenue potential and other which has handsome revenue potential. The first kind of infrastructure must be totally government financed whereas the later can be developed on PPP mode. Since resource constraints will continue to limit public investment in infrastructure, PPP-based development needs to be encouraged wherever feasible.

Land Acquisition

Another significant challenge in achieving the infrastructure goal is the way land acquisition is done for infrastructure projects. Compensation fixed in terms of registered value is always the bone of contention. There is always a substantial difference between the compensation offered and the actual value of the land. The land owners always feel aggrieved which results in dispute and litigation.

However, The Land Acquisition and Rehabilitation & Resettlement Bill would be able to tackle this issue of land acquisition favourably.

Clearances from numerous agencies

Most of the infrastructure projects in India suffer from delays in completion. This is mainly due to an inadequate regulatory framework and inefficiency in the approval process. Infrastructure projects require multiple sequential clearances at various levels of government. There are various approvals needed at every stage which definitely delay the infrastructure projects.

Environmental Impact Assessment (EIA)

Environmental safeguards and guidelines have proven to be one of the major reasons for delay in infrastructure projects, especially in the power sector. While new projects need to comply with these regulations, even a project under construction may need to comply with revised standards midway through the execution stage.

Poor pre-construction planning

Due to the already adverse effect of various impediments like land acquisition, statutory approvals, delayed financial closure, etc. the pre-construction phase of infrastructure projects is pretty long. Therefore, there is delayed commissioning and completion of projects.

Suggestions and Way Forward

It must be noted that India’s Infrastructure which is an essential and most important component of Urban Development, is in a poor shape and needs an immediate attention and redress both from Government and Industry. Following are some of the ways to surpass the challenges faced by infrastructure development:

  • There must be a more conducive environment for potential concessionaire. There is always a worry of early clearances and investors are stuck in the bureaucratic cycle.
  • There is a necessity for improvements in the investment climate.
  • Migration of large population to urban centres is causing new cities to emerge and existing ones to expand. This is causing rapid urbanization. Therefore, India needs to develop satellite cities for which the need is of mass-transport systems.
  • There must be Single window statutory clearance which even includes Environmental clearance to projects.
  • There are good competent people working in different departments of government, however they are working in silos, we need better and effective coordination for a fast project roll out.

There is no doubt that fiscal support is the dominant factor for infrastructure development but equally important is enabling policies from the governments end. Then only the world class infrastructure dream of India can be realized and place India’s economy on a high growth trajectory.

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