Weak infrastructure deficit cost accounts for 13% of GDP: PHD

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New Delhi, June 01 (UNI) Country's GDP contributes almost 13 per cent to the cost of weak infrastructure which adds to the transaction cost of Indian products, revealed an analysis made by PHD Chamber.

The infrastructure handicap has been worked out taking into consideration four key segments such as highways, ports, airports, railways and power.

''Performance of these segments has been benchmarked against competitor countries' performance and achievement to have a realistic idea about "infrastructure deficit," PHD Chamber President L K Malhotra said in a statement.

The average turnaround time at Indian ports is 5.9 days while it is just eight hours at the competitor ports. Inadequate berths, rail/road connectivity, unionisation are the major constraints.

The chamber pointed out that national highways (NH), which has a total length of 65,569 kms, constitute only two per cent of the road network in the country, though it hauls 40 per cent of the traffic.

Only, 12 per cent of the NH is four lane and the rest are either two or single lane.

''Old technology; saturated routes, slow average speed of freight movement (22 Kmph) and passenger traffic (50 Kmph) are some of the handicaps being faced by the railways in India, which increases the turnaround time,'' the industry body said.

The proposed North-West corridor, for speedy freight movement seems to be taking more time than expected, while the plan for the bullet trains for freight movement along the Golden quadrilateral road network still remains a pipe dream.

PHD Chamber said the inadequate facilities at the airports for cargo handling, lack of facilities for storing, stuffing and de-stuffing, lack of specified containers for movement of delicate export items like flowers are the major handicaps being faced by the air traffic sector.

The industry body said the power sector is upfront with 11 per cent peaking deficit, 7 per cent energy shortage; high T&D losses, absence of competition and inadequate private and public investment.

The chamber has suggested that infrastructure financing should be encouraged to augment the infrastructure growth.

According to PHD Chamber, this can be achieved through development of domestic debt capital market, such as 'Bharat Nirman Bond', tapping the potential of insurance sector, introducing attractive bridge loans, rationalising banks' and NBFCs' participation in infrastructure financing, facilitating equity flows into infrastructure, and inducing foreign investment into infrastructure.

The other measures include incentivising investment in the infrastructure sector by a mix of fiscal support, tax concessions and enhanced credit guarantee and directed resource allocation like levying of road cess.

The chamber also recommends generation of resources for infrastructure development, need for investor friendly land acquisition policies and bidding procedures to encourage private investors to actively participate in infrastructure.

The other measures jolted by the chamber include need for continuation of tax / interest incentives to sustain investments and reforms in mineral laws and coal sector policy to encourage private.


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