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Paved with big words: on govt’s strategy to rescue economy

Revving up infrastructure spending is necessary, but not sufficient

The Central government is betting on a two-pronged strategy, revealed this week, to rescue the economy from the slowdown. Along with recapitalization of public sector banks, it announced a huge roads project, which will help scale up public spending on infrastructure and boost job creation and growth. The plan is to spend almost ₹7 lakh crore to build 83,677 km of highways, traversing mostly the northern and eastern parts of the country, by March 2022. The government estimates that the Bharatmala  Pariyojana, which constitutes a major component of this plan, could itself create as many as 14.2 crore man-days of work directly, in addition to permanent jobs after completion. The benefits to the economy are likely to be significant if the programme, as envisaged, manages to successfully connect 550 districts as well as coastal ports to national highways, among other things. While it is hard to quantify the likely economic benefits from the project, Transport Minister Nitin Gadkari expects the contribution to GDP to be significant. With money flowing in from the government and market borrowings, funding is unlikely to be an issue. The same, however, cannot be said about the other familiar challenges in the infrastructure space.

With this massive roads project, Prime Minister Narendra Modi may be banking on replicating, or even bettering, the National Highways Development Project of the Atal Bihari Vajpayee government. However, its success will depend largely on how the government tackles problems that have held back the implementation of infrastructure projects over the last couple of decades. While ₹2.09 lakh crore of the ₹5.35 lakh crore Bharatmala investment will be funded by market borrowings, over ₹1 lakh crore is expected to come in the form of private investments. Private infrastructure companies already reeling in the aftermath of aggressive past bids and leveraged balance sheets will need more clarity to be genuinely interested in such projects. This is an opportune time for the government to bring out of cold storage the blueprint for reviving public-private partnerships — prepared about two years ago by a panel headed by former Finance Secretary Vijay Kelkar. Just as it isn’t clear why the government waited three years to unleash the full gamut of reforms needed to fix the banking sector’s bad loan mess, it is difficult to understand why little has moved on the PPP framework after the Kelkar report came in late-2015. The NDA government’s very first Budget allocated ₹500 crore to create a new body called 3P India to reboot the earlier PPP route that had left several projects stranded, with developers fleeing in the face of execution issues. That institution is still to see the light of day, while land acquisition reforms attempted in the NDA’s first year have also been abandoned. More attention is needed on these fronts to ensure this infrastructure ramp-up delivers, and on time.

MEANINGS : –

Pronged –   pierce or stab with a fork –  दाँतोंवाला

Revealed – make (previously unknown or secret information) known to others – प्रकट

Rescue –  save (someone) from a dangerous or difficult situation – बचाव

Constitutes –  be (a part) of a whole – गठित करना

 Component  –  a part or element of a larger whole, especially a part of a machine or vehicle – अवयव

Economy  the state of a country or region in terms of the production and consumption of goods and services and the supply of money.- अर्थव्यवस्था
Significant – sufficiently great or important to be worthy of attention; noteworthy.- महत्वपूर्ण

Envisaged –  contemplate or conceive of as a possibility or a desirable future event- परिकल्पना

Quantify – express or measure the quantity of – मात्रा ठहराना

Flowing –  (especially of long hair or clothing) hanging or draping loosely and gracefully.- बहता हुआ

Borrowings –  the action of borrowing something.- उधारी

Massive –  large and heavy or solid.- बड़ा

Replicating –  make an exact copy of; reproduce- प्रतिलिपिकारक

Implementation – the process of putting a decision or plan into effect; execution- कार्यान्वयन

Decades – a period of ten years- दशक

Aggressive –  ready or likely to attack or confront; characterised by or resulting from aggression.- आक्रामक

Bids –  offer (a certain price) for something, especially at an auction.-  बोली

Leveraged – use borrowed capital for (an investment), expecting the profits made to be greater than the interest payable.- उत्तोलन

Blueprint –  a design plan or other technical drawing.- खाका

Reviving – restore to life or consciousness.- पुनर्जीवित

Unleash- release (a dog) from a leash.- फैलाया

Gamut – the complete range or scope of something- सरगम

Reforms – make changes in (something, especially an institution or practice) in order to improve it. – सुधारों

Execution- the carrying out of a plan, order, or course of action.- क्रियान्वयन

Acquisition  – an asset or object bought or obtained, typically by a library or museum – अर्जन

Abandoned-   having been deserted or left. – त्यागा हुआ

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